CANADA STOCKS-TSX sinks to 3-month low on growth fears, Poseidon plunges
* TSX ends down 118.41 points, or 0.99 percent, to 11,811.38 * Materials sector falls more than 2.0 percent * Poseidon Concepts down more than 60 percent By Claire Sibonney TORONTO, Nov 15 (Reuters) - Canadian shares tumbled to a three-month low on Thursday, hit by global recession fears, violence in the Middle East, and a massive drop in the stock price of Poseidon Concepts Corp after the energy services company cut its outlook. It was the fourth straight days of falls for Toronto's main stock index, now down 1.2 percent since the start of the year. The materials sector, home to mining companies, dropped more than 2.0 percent as commodity prices slid, with Goldcorp Inc down 3.3 percent at C$39.92 and Barrick Gold falling 2.1 percent to C$33.28. Gold prices fell more than 1.0 percent to a one-week low as data from the World Gold Council showed global demand dropped. "We've seen quite a flood of money leave the gold group, and that's largely because earnings haven't been up to par in some of the bigger names in the group," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. Picardo noted especially disappointing results from Barrick and Iamgold Corp, down 1.4 percent to C$11.81. Financial markets have also been hit by worries fears about budget negotiations in Washington, the failure of which could trigger tax hikes and spending cuts that could push the U.S. economy, the world's biggest, into recession. "The biggest issue for investors is still the 'fiscal cliff' in the United States and the entrenched political positions on both sides," said Julie Brough, vice president at Morgan Meighen and Associates. "We're in a period of heightened uncertainty after what was a quiet period when people lulled themselves into a complacent state." Adding to the selling pressure, data on Thursday showed the United States reported a spike in new claims for jobless benefits last week and also showed the euro zone slipped back into recession in the third quarter, its second recession since 2009. The Toronto Stock Exchange's S&P/TSX composite index ended down 118.41 points, or 0.99 percent, at 11,811.38. Eight of the 10 sectors were weaker. Earlier in the session, the index fell to 11,761.34, its lowest point since Aug. 7. "We're bouncing up and down like a yo-yo on a very long string. This is a very long, emotion-fueled week for the market," said Barry Schwartz, portfolio manager at Baskin Financial Services. POSEIDON PLUNGES Energy services company Poseidon Concepts Corp lost more than 60 percent of its value and was one of the largest drags on the Toronto market. Poseidon's shares fell to C$5.00 after it posted weak results and cut its outlook. The energy sector as a whole was down 0.6 percent as oil prices fell in volatile trade as economic fears outweighed the escalation of violence between Israel and Palestinians which initially raised concerns about Middle East oil supplies. Two rockets fired from the Gaza Strip targeted Tel Aviv on Thursday in the first attack on Israel's commercial capital in 20 years. While there might be a potential spinoff benefit to the TSX in terms of higher crude oil prices due to the conflict, the overall risk aversion to be expected would probably not help the TSX at all, some analysts said. The financial sector declined 0.8 percent as the disappointing economic data dampened sentiment. Bank of Montreal fell 1.1 percent to C$57.08. Fairfax Financial Holdings Ltd dropped 6.0 percent after touching a three-year low after the stock was unexpectedly deleted from the MSCI Canada index. Research in Motion shares rose 3.4 percent to C$8.80, a day after its chief executive expressed confidence that a new line of BlackBerry 10 devices would offer long-term value for unhappy shareholders.
© Thomson Reuters 2016 All rights reserved.