CANADA STOCKS-TSX cuts losses as Bernanke speech digested

Fri Aug 26, 2011 11:23am EDT
 
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   * TSX down 37.69 points, or 0.3 percent, at 12,246.62
 * Seven of 10 MAIN sectors stronger
 * Bernanke offers no additional stimulus measures
 (Updates with details, commentary)
 By Claire Sibonney and Trish Nixon
 TORONTO, Aug 26 (Reuters) - Toronto's main stock market cut
early losses in volatile trade on Friday morning as investors
deemed an earlier sharp selloff overdone as they digested
remarks by the Federal Reserve chairman.
 In an eagerly awaited speech to central bankers in Jackson
Hole, Wyoming, Ben Bernanke stopped short of of signaling
further action to boost growth, but said it was critical for
the U.S. economy's health to reduce long-term joblessness.
[ID:nW1E7JM00N]
 "I'm not sure how disappointing it really is," said Fergal
Smith, managing market strategist at Action Economics.
 "I think there will be a certain degree of discovery about
that over the coming days, but in so far as the market was
hoping for additional steps that would support asset markets,
it didn't get that today."
 Financials were the hardest hit, falling 1.2 percent after
disappointing results from Royal Bank of Canada (RY.TO: Quote). RBC,
the most influential decliner, tumbled 3.1 percent to C$49.26
reported results that fell shy of estimates. [ID:nN1E77N0YI]
 Toronto-Dominion Bank (TD.TO: Quote) dropped 1 percent to C$74.01,
and Bank of Nova Scotia (BNS.TO: Quote) shed 0.7 percent to C$51.77.
 At 11:07 a.m. (1507 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 37.69 points, or 0.3
percent, at 12,246.62. Seven of the 10 main sectors were
higher, including weighty energy and materials.
 The TSX had initially fallen more than 1.5 percent after
Bernanke's speech, but quickly pared losses and briefly climbed
into positive territory.
 "The major anti-inflationary weapon was the leaving
interest rates at zero for two years ...  It may well be that
he's keeping something in reserve in the event that we get
further weakness through the fall. He doesn't want to use up
all his ammunition in one go," said Gavin Graham, president at
Graham Investment Strategy.
 "He did say the Federal  Reserve has a range of tools that
could be used to provide additional monetary stimulus in
addition to refining our forward guidance. So there are some
other arrows left in his quiver."
 North American markets were down sharply even before
Bernanke's speech, after data showed the U.S. economy grew much
slower than previously thought, adding to the cautious tone.
[ID:nN1E77P09C]
 On the upside, the top three gainers were Potash Corp
(POT.TO: Quote), which rose 1.5 percent to C$54.86, Suncor Energy
(SU.TO: Quote), up 1.5 percent to C$29.97 and Research In Motion
RIM.TO up 3.6 percent to C$28.89.
 ($1=$0.99 Canadian)
 (Reporting by Claire Sibonney; editing by Rob Wilson)