August 12, 2008 / 6:12 AM / 9 years ago

Stocks falter as credit woes weigh

4 Min Read

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007.Mark Blinch</p>

TORONTO (Reuters) - The Toronto Stock Exchange's main index closed lower on Tuesday as financial shares fell on worries over more losses related to the credit crunch, offsetting a rebound by gold producers.

Bay Street's financials were caught up in more woes out of the United States after JPMorgan Chase (JPM.N) said it has accumulated $1.5 billion of losses so far this quarter on mortgage-related assets.

The news stoked concerns of more pain yet to come out of the U.S. financial crisis, and in Toronto National Bank of Canada (NA.TO) slid 2.8 percent.

"What it boils down to in the big picture is we've had a liquidity boom for 20-odd years," said Levente Mady, broker at MF Global Canada in Vancouver.

"Now the ship is turning around and we're getting a liquidity contraction and that's not good for financials -- period."

The S&P/TSX composite index .GSPTSE closed down 36.19 points, or 0.27 percent, at 13,167.00 with six of its 10 main sectors in negative territory. It was the fourth session in a row the benchmark index has closed lower.

The financial sector lost 1.1 percent, with National Bank down C$1.46 at C$50.44, and Royal Bank of Canada (RY.TO) falling 79 Canadian cents, or 1.7 percent, to C$47.13.

"The financials have just stopped lending," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc. in Vancouver.

"If you don't lend, you don't generate profits, and the bottom line gets a little slimmer every day."

Leading the upside, the materials sector got a boost from gold-mining stocks, even though gold prices fell, as the sector rebounded from a recent selloff.

The gold producers subindex gained 2.6 percent, giving a 2.1 percent lift to the larger materials sector. Agnico-Eagle Mines (AEM.TO) added C$2.92, or 6 percent, to C$51.92, and Goldcorp (G.TO) rose C$1.25, or 3.9 percent, to C$33.18.

The golds group had tumbled for the past three sessions, amounting to losses of nearly 10 percent.

Shares of silicon processor Timminco TIM.TO slumped C$4.87, or 24.4 percent, to C$15.10 after the company reported quarterly results on Monday that were not as strong as anticipated.

The industrials sector sagged 2.9 percent, with Canadian Pacific Railway (CP.TO) down C$3.00, or 4.5 percent, at C$64.17, and SNC Lavalin (SNC.TO) was down C$1.60, or 3.1 percent, to C$50.85.

Market volume was 367 million shares worth C$6.5 billion. Decliners outpaced advancers 822 to 653. The blue chip S&P/TSX 60 index .TSE60 closed down 1.59 point, or 0.2 percent, at 788.57.

In New York, stocks were also taken lower by fresh worries about the credit crunch as shares in JPMorgan fell. The Dow Jones industrial average .DJI closed down 139.88 points, or 1.19 percent, at 11,642.47, while the Nasdaq composite index .IXIC edged down 9.34 points, or 0.38 percent, to 2,430.61.

($1=$1.06 Canadian)

Editing by Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below