Economic worries end Toronto stocks' 6-day rally
By Leah Schnurr
TORONTO (Reuters) - The Toronto Stock Exchange's main index closed lower on Tuesday, ending a six-session rally, amid disappointing corporate results and comments from the Bank of Canada that U.S. economic prospects were worse than previously thought.
The central bank cut its key interest rate by a half a percentage point but said its outlook for the United States has worsened since January, underscoring worries over the impact a slowing U.S. economy could have on Canada.
"You get the central bank cutting rates a half point and saying, despite strong domestic conditions, the slowdown in the States is worse than we thought," said Gavin Graham, chief investment officer at Guardian Group of Funds. "It obviously does focus attention."
Canadian Pacific Railway (CP.TO: Quote) also weighed on the benchmark, falling C$3.03, or 4.3 percent, to C$68.22, after it reported a drop in first-quarter profit and lowered its earnings expectations for the year.
The S&P/TSX composite index .GSPTSE closed down 54.82 points, or 0.38 percent, at 14,266.34 with all but two of its 10 main sectors lower.
EnCana (ECA.TO: Quote) and Fording Canadian Coal Trust FDG_u.TO both finished lower after posting declines in profit. Fording was down C$2.30, or 3.4 percent, at C$65.21, while EnCana lost 60 Canadian cents, or 0.7 percent, to C$86.08.
The heavyweight financials sector slipped 0.8 percent. Toronto-Dominion Bank (TD.TO: Quote) was down 76 Canadian cents, or 1.2 percent, at C$64.44, and Royal Bank of Canada (RY.TO: Quote) dipped 30 Canadian cents, or 0.6 percent, to C$48.03.
The industrials sector gave up 1.5 percent, hurt by CP Rail, as well as a retreat by Canadian National Railway (CNR.TO: Quote), which reported a weaker profit late on Monday. CN was down 43 Canadian cents, or 0.8 percent, at C$51.87. Continued...