CANADA STOCKS-TSX tripped up by resources, but Potash gains

Thu Oct 21, 2010 5:18pm EDT
 
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   * TSX falls 0.4 percent to 12,599.23
 * Eight of 10 main sectors decline
 * Potash rises as Saskatchewan rejects BHP's bid
 (Adds details, quotes)
 TORONTO, Oct 21 (Reuters) - Toronto's main stock index fell
on Thursday, led by a selloff in commodity prices, as investors
fretted about the sluggish pace of the U.S. recovery, despite
another round of strong U.S. corporate earnings.
 U.S. dollar-denominated commodity prices extended declines,
namely gold and crude oil, accelerated by a rebound in the U.S.
greenback, and sent the TSX's materials group down 0.91 percent
and the energy sector off 0.62 percent.
 "It's not surprising, given that both those commodities are
off quite significantly," said Elvis Picardo, analyst and
strategist at Global Securities in Vancouver, said of the TSX's
retreat.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed down 50.69 points, or 0.4 percent, at
12,599.23. Eight of its 10 main groups fell.
 Key decliners included Suncor Energy (SU.TO: Quote), down 1.8
percent at C$33.66, and Kinross Gold (K.TO: Quote), which shed 3.39
percent to C$17.96.
 Toronto-Dominion Bank (TD.TO: Quote) fell almost 1 percent to
C$75.28, while Encana (ECA.TO: Quote) dropped 2.64 percent to
C$28.36.
 Potash Corp (POT.TO: Quote) rose 0.5 percent to C$146.68 after the
province of Saskatchewan, home base for the world's biggest
fertilizer producer, said it was opposed to the $39 billion
takeover bid by BHP Billiton (BHP.AX: Quote).
 Saskatchewan Premier Brad Wall said the province will urge
the federal government to block the Anglo-Australian miner's
hostile bid. [ID:nN2199148] [ID:nN22340110]
 The index has been trading sideways in recent sessions,
after gaining around 10 percent since late August, and has not
been far off its two-year high reached last week.
 "It looks like the market is waiting for the other shoe to
drop in terms of at least a modest correction. I think the
overall sentiment is still quite good, but I think at the back
of investors' minds there's this thing about October always
being a rocky month," said Picardo.
 The month of October has historically been a volatile month
for equities. It typically ekes out modest gains to follow
September's track record of poor returns, but it has also been
marked by spectacular crashes. [ID:nN01110674]
 Confidence in U.S. corporate earnings firmed on results
from heavy-equipment maker Caterpillar Inc (CAT.N: Quote), auctioneer eBay Inc (EBAY.O: Quote), online movie streaming service Netflix Inc
(NFLX.O: Quote) and miner Freeport-McMoRan Copper & Gold. (FCX.N: Quote).
 A batch of new U.S. data on Thursday painted a picture of
an economy stuck in slow-growth mode, reinforcing views that
the U.S. Federal Reserve will ease monetary policy further next
month to try to reinvigorate the recovery. [ID:nN21275986]
 "There's still a lot of indecision in this market. The
macroeconomic picture is not as bright as what we'd want it to
be and yet the corporate picture still looks reasonably strong
with all these companies coming out with respectable earnings
and guidance," said Gareth Watson, Canadian equity adviser in
the Portfolio Advisory Group at ScotiaMcLeod.
 "At some point that divergence ... has to come into play."
 ($1=$1.03 Canadian)
 (Reporting by Ka Yan Ng; editing by Rob Wilson)