CANADA STOCKS-TSX undercut by falling commodities, US data

Tue Jul 28, 2009 5:20pm EDT
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 * TSX drops 1.74 percent to 10,570.54
 * Materials sector leads selloff
 * Weak U.S. earnings, consumer confidence data hit market
 * Rogers Comm profit up, rev outlook cut; drops 4.9 pct
 (Adds details and comments)
 By Ka Yan Ng
 TORONTO, July 28 (Reuters) - Toronto's main stock index
fell hard on Tuesday as sharply lower commodity prices and weak
U.S. consumer confidence prompted profit-taking after a big
run-up in the index.
 Disappointing quarterly corporate results in the United
States also convinced investors to pocket some of the market's
sharp recent gains.
 The slide was headed by the index's mining-laden materials
group, which fell 3.5 percent on a drop in gold prices. The
energy group dropped 1.92 percent as the price of oil fell.
 Shares of miner Goldcorp G.TO, the biggest drag on the
index, were off 5.92 percent at C$39.11, while Barrick Gold
Corp ABX.TO was down 4.2 percent at C$36.21. Kinross K.TO
was also a heavy loser, down 6.2 percent at C$20.55.
 "Commodities certainly are driving it today, and financials
are also in the game," said Adrian Mastracci, portfolio manager
and president of KCM Wealth Management Inc in Vancouver.
 "Today we got a little bit of profit-taking but it's also
not too terribly surprising. We've had a long run now. It does
point to the fact that some investors are being a little
cautious, and rightly so."
 The S&P/TSX composite index .GSPTSE closed down 186.89
points, or 1.74 percent, at 10,570.54. Nine of its 10 main
groups were lower, including the hefty financials, which fell
1.3 percent.
 The tumble came a day after the TSX index rallied to its
highest level in nearly 10 months and after a 44 percent climb
from the five-year low it fell to in March.
 "When you have that kind of move up it wouldn't surprise me
at any point in time to see the market go through some period
of consolidation," said Peter Chandler, senior vice-president
at Canaccord Capital in Waterloo, Ontario. "So ... it's just a
catch of breath after an unparalleled rise."
 The selloff came after Viacom Inc VIAb.N and Office Depot
Inc ODP.N both delivered disappointing quarterly results and
spurred investors to seek more evidence of economic rebound.
 Meanwhile, conflicting U.S. data showed U.S. home prices
rose in May for the first time in three years, but a weakening
job market hit consumer confidence in July and could prevent
near-term economic recovery. [ID:nN28406937]
 In Canada, business confidence rebounded in the second
quarter, but many business leaders said their companies are
still operating well below capacity, a survey showed.
 Shares of Rogers Communications Inc RCIb.TO, another key
drag on the index, fell 4.9 percent to C$29.45 after the
company slashed its revenue outlook and said its wireless
subscribers were cutting back on spending. [ID:nN2890483]
 The healthcare sector was the lone advancing sector, eking
out a 0.14 percent gain. Cardiome COM.TO said it had achieved
a milestone from collaboration with Merck & Co Inc. Cardiome
rose 5.4 percent to C$4.68.
 ($1=$1.08 Canadian)
 (Additional reporting by Frank Pingue; Editing by Peter