CANADA STOCKS-TSX drops to six-week low on bank results, Fed fears

Thu Dec 5, 2013 5:02pm EST
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* TSX falls 104.52 points, or 0.79 percent, to 13,200.40
    * All of the 10 main index sectors decline
    * RBC, TD Bank drop after results
    * Barrick down after board shuffle
    * Dollarama slips after results miss expectations

    By John Tilak
    TORONTO, Dec 5 (Reuters) - Canada's main stock index dropped
to a six-week low on Thursday after results from major banks
weighed on financial shares and strong U.S. economic data
heightened expectations that the Federal Reserve will scale back
its monetary stimulus program.
    Shares of Royal Bank of Canada and Toronto-Dominion
Bank fell after Canada's two biggest lenders reported
quarterly results. RBC also said Chief Executive Gordon Nixon
will step down next summer after 13 years in his position.
    Market focus returned to speculation about when the Fed
would begin rolling back, or tapering, its bond buying program
after a string of positive U.S. economic numbers this week
strengthened the case for a Fed pullback.
    On Thursday, a report showed the U.S. economy grew faster
than initially estimated in the third quarter as businesses
accumulated stock. 
    The Toronto stock market's benchmark index fell for a third
straight session on Thursday, with all of its sectors in
negative territory. The benchmark, however, has gained in each
of the past five months. 
    "It's more of the markets taking a little bit of a breather
here than going into a significant correction," said David
Cockfield, managing director and portfolio manager at Northland
Wealth Management. 
    "You still have the underlying fear on the part of portfolio
managers of being caught fully invested just when the market
decides to really tank," he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed 104.52 points, or 0.79 percent, lower at
13,200.40, its lowest since Oct. 22.
    Cockfield is neutral on Canadian equities, but expects the
TSX's growth in 2014 to mirror its performance this year. The
benchmark is up about 7 percent in 2013.
    All of the 10 main sectors on the index were in the red with
financials, the index's most heavily weighted sector, down 0.8
percent. RBC lost 1.2 percent to C$68.17, and TD gave back 1.4
percent to C$94.40. 
    RBC's quarterly profit rose 11 percent, the country's
largest lender said, while TD said its quarterly profit rose 1.6
percent, missing expectations. TD also announced a 2-for-1 stock
    Canadian Imperial Bank of Commerce fell 1.4 percent
to C$88.82 after reporting that its quarterly profit slipped 1.9
percent, with one-time charges offsetting a rise in retail and
wealth management income.
    The price of bullion tumbled, weighing on shares of gold
miners. Goldcorp Inc shed 3.5 percent to C$22.14, and
Barrick Gold Corp stumbled 2 percent to C$16.39.
    Barrick addressed some investor demands for a more
independent board on Wednesday, and it replaced two directors
close to its founder with a pair of mining industry experts.
Founder and Chairman Peter Munk will step aside in the
    Dollarama Inc posted a 20 percent rise in profit
due to higher sales and new store openings, but the results fell
short of expectations. The stock was down 2.4 percent at C$85.