CANADA STOCKS-TSX falls on weak data, Spain downgrade

Fri May 28, 2010 4:38pm EDT
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* TSX closes down 77.68 pts, or 0.66 pct, at 11,671.44

* Banking shares lead index lower

* Eight of the index's 10 main groups down (Updates to close, adds details, quotes)

By Claire Sibonney

TORONTO, May 28 (Reuters) - Toronto's main stock index ended lower on Friday, after weak U.S. data and a downgrade of Spain's credit rating undermined confidence and investors moved to the sidelines ahead of a long weekend in the United States.

U.S. equities also extended earlier losses after Fitch Ratings cut Spain by one notch from its AAA status, reigniting worries about euro-zone debt issues, and sending influential oil and metal prices down. [.N] [O/R] [MET/L]

"Today is one of those days when a confluence of factors has combined to make things negative yet again for the markets," said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.

Besides developments in the euro zone, Picardo said risk-averse investors are also paying close attention to the prospect of a Korean military conflict.

"Sentiment is turning on a dime on a day to day basis."   Continued...