TSX finishes lower as oils, Manulife weigh

Thu Nov 19, 2009 5:17pm EST
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By Jennifer Kwan

TORONTO (Reuters) - Toronto's main stock index skidded on Thursday as oil prices dropped and Manulife Financial rattled investors by announcing a surprise, C$2.5 billion stock offering.

Manulife fell 6.1 percent to C$18.95, topping the list of declining issues. Late Wednesday, North America's biggest life insurer acknowledged its huge equity issue would dilute its earnings per share and return on equity.

"It was an unexpectedly large issue and it took the market by surprise," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd in Calgary.

The S&P/TSX composite index finished down 52.39 points, or 0.45 percent, at 11,600.30, with eight of its 10 main groups lower. The drop ended four sessions of gains for the index.

Among energy issues, EnCana Corp dropped 2 percent to C$56.67, and Suncor Energy slid 0.8 percent to C$38.25. Oil prices fell partly on weaker U.S. economic news that stirred concerns about energy demand in Canada's largest trading partner.

"The economic news has generally been a bit weaker in the last 24 hours, particularly on the U.S. housing front," Kerkovius said.

A record one-in-seven U.S. mortgages were in foreclosure or at least one payment past due in the third quarter, according to industry data that raised questions about a recovery in the housing market.

The pullback by Toronto stocks came after the resource-heavy TSX rose to a 13-month high earlier this week. Investors were pausing in hopes of getting a clearer picture on the economy in coming sessions, said Paul Harris, portfolio manager at Avenue Investment Management.   Continued...

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