July 16, 2010 / 3:00 PM / 9 years ago

CANADA STOCKS-TSX slides as resources drop on growth fears

* TSX falls 127.88 points to 11,613.89

* Nine of 10 TSX groups lower; healthcare lone gainer

* U.S. consumer data sparks fears about growth (Adds details, quotes)

By Jennifer Kwan

TORONTO, July 16 (Reuters) - Toronto’s main stock index was lower shortly after the open on Friday as weaker commodity prices, including a drop in the price of oil, pushed down shares of resource companies.

The TSX retreated in lockstep with U.S. equities, which skidded after Citigroup, Bank of America and General Electric all posted disappointing revenues, while consumer data suggested sluggish U.S. demand and pointed to a weak recovery. [.N]

A reading on consumer sentiment dropped to its lowest level in 11 months, while consumer prices fell for a third straight month in June, heightening concerns about deflation. [ID:nN1653074]

The gloomy U.S. reading outweighed data from Statistics Canada showing a gradual recovery in manufacturing pushed up Canada’s composite leading indicator by 1.0 percent in June, outweighing the effects of a cooler housing market.

Royal Bank of Canada (RY.TO) fell 1.4 percent to C$54.26, in line with the disappointment about the U.S. bank earnings.

Suncor Energy Inc (SU.TO) fell 1 percent to C$32.53 and Canadian Natural Resources (CNQ.TO) dropped 0.7 percent to C$36.75 as the price of oil sagged on concerns over the pace of economic recovery. [O/R]

Barrick Gold (ABX.TO) fell 1.8 percent, while Goldcorp (G.TO) slid 1.4 percent as bullion prices sank, in part on technical factors. [GOL/]

“We’re off the risk resource trade because all the metals are all weak, golds are weak, oil is weak, the financials are weak so everything is down in Canada basically,” said Paul Hand, managing director at RBC Capital Markets.

At 10:30 a.m. (1430 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 127.88 points at 11,613.89, with nine of its 10 main sectors lower. The small health care group was up 2 percent.

Elsewhere, North American potash inventories at the producer level fell slightly in June but remained above the historic average, according to data released by Potash Corp POT.TO, the world’s largest producer of the fertilizer. [ID:nN16273881] Potash shares fell 0.9 percent to C$101.65.

Bombardier Inc (BBDb.TO), whose stock was unchanged, said on Friday that its Chinese joint venture had won a contract for 40 high-speed train sets from China’s Ministry of Railways, worth about US$761 million. [ID:nN1657524]

$1=$1.05 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson

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