CANADA STOCKS-TSX slips on Europe fears, Sun Life warning

Mon Oct 17, 2011 4:30pm EDT
 
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   * TSX ends down 158.69 points, or 1.3 pct, at 11,923.04.
 * Energy, materials, financials weaker
 * Sun Life falls 9 percent on earnings warning
 (Updates to close)
 By Claire Sibonney
 TORONTO, Oct 17 (Reuters) - Toronto's main stock index fell
steeply on Monday after Germany quashed hopes of a speedy
breakthrough in the euro zone's debt crisis, and after Sun Life
Financial (SLF.TO: Quote) warned it would report a big quarterly
loss.
 The TSX's three biggest sectors - materials, energy and
financials - were off 1 to 2 percent as commodity prices fell
and domestic earnings expectations succumbed to worries about
the global economy.
 Sun Life was the most influential decliner, slumping 9
percent to C$24.07 after Canada's third largest insurer said it
expects to post a loss of C$621 million in the third quarter
due to unfavorable moves in both interest rates and equity
markets. [ID:nN1E79G066]
 "Some people are surprised but there's been talk about the
financial sector coming up with down earnings," said John Ing,
president of Maison Placements Canada. "It comes at a time when
these stocks have been under pressure."
 No. 1 insurer Manulife Financial (MFC.TO: Quote) retreated in
sympathy, falling 4.6 percent to C$12.34.
  Compounding pressure on the financials were disappointing
earnings from Wells Fargo & Co (WFC.N: Quote), the fourth-largest U.S.
bank, which fell 8.4 percent to $24.42 and was the biggest
weight on the S&P 500.
 With fears of a global recession in the air, investors were
anxious about the outlook for Canada's biggest companies, as
earnings season kicks off this week. [.TO/O]
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 158.69 points, or 1.31 percent, at
11,923.04.
 Energy shares were among the heaviest drags after an
aggressive run-up last week. Among the top decliners, Suncor
Energy (SU.TO: Quote) fell 3 percent to C$29.76 and Canadian Natural
Resources (CNQ.TO: Quote) dropped 3 percent to C$31.96.
 In individual company news, Research In Motion fell 5.6
percent to C$22.90 as an offer of free games, translation
software or other apps to compensate BlackBerry users for last
week's prolonged outage failed to impress investors.
[ID:nN1E79G148]
 Weighing on broader sentiment, German Finance Minister
Wolfgang Schaeuble said European Union governments would adopt
a five-point plan at the Brussels summit on Oct. 23, but
cautioned "we won't have a definitive solution this weekend."
[ID:nL5E7LH1GL]
 Optimism that the euro zone was making progress in
resolving its sovereign debt crisis had helped push the TSX to
notch its best week since October 2009 on Friday.
 "We've had an extremely long up-streak in October and I
think there was too much hope priced in the market," said
Francis Campeau, a broker at MF Global in Montreal.
 "The market today is going back to reality."
 Highlighting recent worries about the U.S. economy, a gauge
of manufacturing in New York State contracted for the fifth
month in a row in October as new orders were flat and the
outlook for the coming months weakened. [ID:nN1E79G0EO]
 Data also showed foreign purchases of Canadian securities
slowed to C$7.9 billion in August from C$12.1 billion in July,
with most of the investment going to the bond market.
[ID:nN1E79G0AP]
 ($1=$1.02 Canadian)
 (Editing by Rob Wilson)