January 28, 2010 / 10:30 PM / in 8 years

CANADA STOCKS-TSX hurt by Potash outlook, uncertainty

* TSX ends down 0.62 percent at 11,274.20

* Potash Corp tumbles 8 percent before coming back a bit

* Ben Bernanke confirmed as U.S. Fed chair (Adds details)

TORONTO, Jan 28 (Reuters) - Toronto's main stock index ended lower on Thursday, weighed down by disappointing results and forecasts issued by market heavyweight Potash Corp (POT.TO).

Potash, the world's largest fertilizer producer, led the index's decline all session, ending down 4.55 percent at C$111.26 after it reported earnings and a profit outlook well below market expectations. [ID:nN28196679]

Potash shares had been down by as much as 8 percent earlier in the day, triggering a selloff in other fertilizer stocks despite the company's optimism that fertilizer demand will improve this year.

"It's obviously a bit of a down-drag," said Bruce Latimer, a trader at Dundee Securities. "A stock that carries that much weight on the Toronto Stock Exchange index is going to have an impact."

But it wasn't all bad news for producers of potash, a key crop nutrient. Athabasca Potash API.TO, up 23.88 percent at C$8.30, was one of the highest percentage gainers after global mining giant BHP Billiton (BHP.AX)(BLT.L) agreed to buy it for C$341 million in cash, expanding BHP's asset base in the potash-rich province of Saskatchewan. [ID:nLDE60R1SH]

Also dragging the index down was Canada's largest oil and gas company, Suncor Energy (SU.TO), off 1.04 percent at C$34.35 as the price of oil was fairly flat near $74 a barrel.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 69.91 points, or 0.62 percent, at 11,274.20, though it managed to pare some losses after hitting its lowest level in more than two months earlier in the day.

Nine of the index's 10 main groups declined.

"Very rarely does it go one direction solidly, but we're still seeing some weakness. There's uncertainty," said Steve Ibel, institutional equities trader at Beacon Securities in Halifax, Nova Scotia.

"People are just reluctant to take on large positions. Right now, they're playing out month-end."

While Canadian Pacific Railway (CP.TO) reported better-than-expected profit, it forecast an uncertain market, which helped to push down its shares 3 percent to C$52.76. [ID:nN28145476]

Shares of Celestica Inc (CLS.TO) touched a three-year high, lifted by sturdy quarterly results and an optimistic outlook for its contract electronics manufacturing, but finished the session in negative territory, down 0.19 percent at C$10.52. [ID:nN2840726]

There was some relief in the early moments of the session after U.S. President Barack Obama focused on job creation rather than any concrete details of banking reforms in his State of the Union address on Wednesday. The index's heavyweight financial sector suffered modest losses on Thursday, down 0.37 percent along with the broad market decline.

Soft quarterly results from big U.S. and Canadian companies, ongoing concern about the uneven U.S. economic recovery, and fiscal worries in Greece all contributed to negative investor sentiment.

U.S. senators voted to confirm Ben Bernanke to head the U.S. Federal Reserve as the trading session wound down, which could help lift investor confidence on Friday. Bernanke has been credited with steering the U.S. economy through a wrenching financial crisis but the Fed also under fire for policies that set the stage for the turmoil. [ID:nWBT013578] ($1=$1.07 Canadian) (Reporting by Ka Yan Ng; editing by Peter Galloway)

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