CANADA STOCKS-TSX recovers from lows on Fed hopes

Fri Aug 26, 2011 3:26pm EDT
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   * TSX up 23.13 points, or 0.2 percent, at 12,307.44
 * Eight of 10 main sectors stronger
 * Bernanke offers no additional U.S. stimulus measures
 (Updates to afternoon)
 By Claire Sibonney and Trish Nixon
 TORONTO, Aug 26 (Reuters) - Toronto's main stock index
rebounded in volatile trade on Friday as investors deemed an
earlier sharp selloff overdone after digesting a speech by the
Federal Reserve chairman which left the door open for more U.S.
monetary stimulus.
 Most of the TSX's 10 main sectors were positive, though
financials - the most influential group - dragged the TSX to
underperform its U.S. counterparts after disappointing results
from Royal Bank of Canada RY.TO, the country's biggest
 RBC tumbled 3.7 percent to C$48.89 after it reported a
profit that missed estimates and said weak market conditions
would likely continue to weigh. [ID:nN1E77N0YI]
 Other big banks skidded ahead of earnings releases next
week. Toronto-Dominion Bank TD.TO dropped 1.5 percent to
C$73.62 and Bank of Nova Scotia BNS.TO shed 1.1 percent to
 At 3:09 p.m. (1909 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was up 23.13 points, or 0.2
percent, at 12,307.44. Eight of the 10 main sectors were
higher, including weighty materials and energy shares.
 Francis Campeau, a broker at MF Global Canada in Montreal,
said investors were still looking for direction to take the TSX
out of it is recent tight range and choppy trading - either
above the Aug. 17 high around 12,700 or below the Aug. 8 low
around 11,600.
 While Fed Chairman Ben Bernanke failed to offer any
concrete action for monetary easing at a central bank
conference in Jackson Hole, Wyoming, he said it was critical
for the U.S. economy's health to reduce long-term joblessness.
 "We remain in decision mode," said Campeau. "I don't think
he said anything to trigger a strong rally, nor a strong
selloff. I think we're still in wait-and-see mode."
  Bernanke also said the central bank's policy panel would
meet for two days in September instead of the usual one to
discuss any more stimulus. While expressing long-term optimism,
Bernanke said the Fed found recent developments troubling, and
saw a low inflation rate. [ID:nN1E77O1LR]
 "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."
  On the upside, the top three gainers were Potash Corp
POT.TO, which rose 3.7 percent to C$56.00, Teck Resources
TCKb.TO, up 2.6 percent at C$40.45, and Canadian Natural
Resources CNQ.TO, up 1.1 percent at C$34.78.
 Gold issues were up 1 percent after swinging from losses to
gains, though they lagged the rebound in the price of the
precious metal. [GOL/]
 Kinross Gold K.TO rallied 2.2 percent to C$17.23, while
Goldcorp G.TO gained 1.1 percent to C$50.60.  
 ($1=$0.99 Canadian)
 (Reporting by Claire Sibonney; editing by Rob Wilson)