April 18, 2011 / 2:44 PM / 8 years ago

CANADA STOCKS-TSX hits 1-month low after S&P's US downgrade

 *TSX down 206.73 points, or 1.5 pct, at 13,592.39
 *All 10 index sectors weaker, led by energy
 *S&P cuts U.S. long term outlook to negative  (Updates with details, comments)
 By Claire Sibonney
 TORONTO, April 18 (Reuters) - Toronto’s main stock index fell to a one-month low on Monday morning after Standard & Poor’s cut its long-term outlook for the United States to negative from stable.
 Besides the S&P downgrade, the market was also being buffeted by weaker oil prices, Greek debt concerns, and China’s decision to raise banks’ required reserves.
 Energy stocks were the hardest hit, down 2.5 percent, as U.S. crude prices slipped below $107 a barrel. [O/R]
 Suncor Energy (SU.TO) retreated 3.4 percent to C$40.65, while Canadian Natural Resources (CNQ.TO) lost 3 percent to C$42.33.
 The index’s materials sector was down 2.2 percent as miners were hit broadly, despite gold’s rally to a record high above $1,490 an ounce. [GOL/] [MET/L]
 “We seem to be having a culmination of some bad news and as a result I think investors generally are still taking profits where they can and going into cash ... or gold ... for the time being,” said Michael Sprung, president at Sprung & Co Investment Cousel.
 Barrick Gold Corp (ABX.TO) fell 1.4 percent to C$50.50, while diversified miner Teck Resources TCKb.TO dropped 3.8 percent to C$47.93.
 In downgrading its rating on the United States, S&P said it believes there’s a risk U.S. policymakers may not reach agreement on how to address the country’s long-term fiscal pressures. [ID:nN18195555]
 “People have known that was coming but it’s always a shock when it does happen,” Sprung said.
 “Certainly with the budget deficit in the U.S. and on top of that with the fighting over raising the debt ceiling, I think it was only prudent for the S&P to give a negative outlook warning for the U.S. economy here.”
 At 10:19 a.m. (1419 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 206.73 points, or 1.5 percent, to 13,592.39, after falling to its lowest level since March 17. All of the index’s 10 main sectors were weaker, including financials, off 1.1 percent.
 Sprung said disappointing quarterly results from U.S. bank Citigroup  (C.N) also contributed to the downtrend. [ID:nN18189113]
 Bucking decline, Research In Motion rallied 1.8 percent to C$52.10. The BlackBerry maker may attempt to top Google Inc’s (GOOG.O) $900 million bid for Nortel Networks Corp’s wireless technology patents, according to a media report. [ID:nN17133547]
 ($1=$0.97 Canadian)  (Editing by Peter Galloway)                                         

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