CANADA STOCKS-TSX turns negative on dismal U.S. data, oil

Tue Dec 23, 2008 12:52pm EST
 
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* U.S. crude oil slips 4 pct

* Dismal U.S. data points to deepening downturn (Adds details)

TORONTO Dec 23 (Reuters) - Toronto's main stock index turned negative at midday on Tuesday as dismal U.S. economic data and a 4 percent drop in the price of U.S. crude oil weighed on the market.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 12.46 points, or 0.2 percent, at 8,237.07 after climbing as high as 8,421.13 earlier in the day.

Six of the TSX index's 10 main groups were lower, led by a 0.8 percent drop in the heavyweight energy group and a 0.8 percent drop among industrial shares.

Markets turned negative after U.S. data showed a bleak outlook for consumer spending and fading hopes for a recovery in the housing market. [nLN072227]

"The market is in a funk. The market chooses to look at everything from a negative context and that's just the way it is right now," said Rick Hutcheon, president and chief operating officer at RKH Investments.

"I think the market tends to focus on the negative right now, which probably is symptomatic of a market that is groping for a bottom."

Oil shares dropped as the price of U.S. crude oil fell 5 percent to $38.01 a barrel on the U.S. data.

Oil company Nexen Inc NXY.TO fell 3.1 percent to C$18.89 and Petro-Canada PCA.TO was down 1.8 percent at C$25.04.

Industrial shares were led lower by the country's top railway companies. Canadian National Railway (CNR.TO: Quote) dropped 2.2 percent to C$41.66, and Canadian Pacific Railway (CP.TO: Quote) fell 2.1 percent to C$37.70. ($1=$1.22 Canadian) (Reporting by Scott Anderson; editing by Peter Galloway)