February 21, 2013 / 1:52 PM / 6 years ago

Energy stocks, Bombardier drag TSX to five-week low

TORONTO (Reuters) - Canada’s benchmark stock index dropped to a five-week low on Thursday, led by energy and financial shares, as a bigger-than-expected rise in U.S. weekly jobless claims and surprisingly weak euro zone economic data weighed.

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

Bombardier Inc (BBDb.TO) was also a major drag on the market. Its shares fell about 9 percent after the plane maker reported a sharp drop in quarterly profit.

“There is a bit of worry creeping into the market. I wouldn’t be surprised if the market was to take a pause here or pull back even,” said Michael Sprung, president of Sprung Investment Management.

The market could slip as much as 10 percent in the event of a correction, he added.

Strategists have said the Canadian stock market could be set for a near-term pullback after a rally that took it to 18-month highs, with resource shares seen as especially vulnerable.

“There is a bit of pessimism,” said Irwin Michael, portfolio manager at ABC Funds. “The market has had a nice run.”

Canadian shares followed U.S. and global stocks lower after a raft of U.S. data, from claims for jobless aid to factory activity and consumer prices, pointed to slow economic growth. Euro zone purchasing managers’ data for February pointed to continued weakness in that region. <MKTS/GLOB>

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 74.08 points, or 0.58 percent, at 12,639.97. It earlier touched 12,602.54, its lowest point since January 16.

Six of the 10 main sectors on the index were in the red.

Energy shares slipped 1.2 percent, with oil prices falling to a three-week low on the macroeconomic concerns. <O/R>

Suncor Energy Inc (SU.TO), Canada’s largest energy company, fell 1.5 percent to C$31.52, and Canadian Natural Resources Ltd (CNQ.TO) slipped 1.9 percent to C$29.99.

Financials, the index’s weightiest sector, were down 0.5 percent. Royal Bank of Canada (RY.TO) gave back 0.8 percent to C$63.96 and played the biggest role of any one stock in pulling the market lower.

The sharp drop in Bombardier shares, which closed at C$3.89, was a drag on the industrials group. The sector slipped 1.7 percent.

In other company news, Tim Hortons Inc THI.TO shares fell nearly 3 percent to C$49.30 after the retailer said customer traffic in its established Canadian coffee shops dropped for a third consecutive quarter.

Additional reporting by Jeffrey Hodgson; Editing by Dan Grebler

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