April 18, 2011 / 9:15 PM / in 7 years

CANADA STOCKS-TSX drops to 1-month low on S&P's US outlook

 * TSX ends down 96.79 points, or 0.7 percent
 * Index had been down 1.5 pct earlier in the session
 * Half of 10 main sectors lower
 * S&P revises U.S. long-term outlook to negative  (Updates with details)
 By John McCrank
 TORONTO, April 18 (Reuters) - Toronto’s main stock index closed at its lowest point in a month on Monday after Standard and Poor’s revised its long-term outlook for the United States to negative from stable.
 S&P warned that there was a one-in-three chance it would have to cut its top rating for U.S. government debt within two years if the fiscal situation did not improve. [ID:nN18195555]
 That sent markets plunging around the world, adding to concerns in Europe about Greek indebtedness and to comments from OPEC ministers that high oil prices could strain global growth.
 U.S. oil prices dropped more than $2, and the heavyweight TSX energy sector fell 1.4 percent. [ID:nLDE73H03G]
 Suncor Energy (SU.TO) dropped 2.23 percent to C$41.14, while Canadian Oil Sands COS.TO fell 2.21 percent to C$31.83 and Imperial Oil (IMO.TO) fell 1.67 percent to C$48.82.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 96.79 points, or 0.7 percent, at 13,702.33, its lowest close since March 16. Five of its 10 main sectors were lower. The index had been down more than 1.5 percent early in the day, but recovered more than half its losses.
 “I don’t think the market took enough time time to digest what was actually said,” Barry Schwartz, vice president and portfolio manager at Baskin Financial Services, said of the S&P report. “None of these issues are new.”
 He added that the credit rating agency maintained the U.S.’s top AAA credit rating and had positive things to say about the U.S. economy.
 The TSX’s materials sector slid 1.2 percent as miners were hit broadly, even with the price of gold rallying to a record high near $1,500 an ounce. [GOL/] [MET/L]
 “The market was ripe for profit-taking considering how strong it was in January, February and March,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
 Inmet Mining IMN.TO fell 2.31 percent to C$65.08, Teck Resources TCKb.TO dropped 2.1 percent to C$48.77, and Centerra Gold was down 2.56 percent at C$17.10.
 The index’s financial sector fell 0.65 percent.
 Shares of Toronto-Dominion Bank (TD.TO) fell 0.99 percent to C$81.28. TD said that earnings from TD Ameritrade, which it owns a 46 percent stake in, to add about C$57 million to its second quarter profit. The Omaha, Nebraska-based online broker beat analysts estimates for the quarter, but its shares fell over the U.S. debt concerns. [ID:nN18185790]
 One of the biggest risers on the index was BlackBerry maker Research In Motion RIM.TO, which rallied 3.28 percent to C$52.84. A media report said the company may try to top Google Inc’s (GOOG.O) $900 million bid for Nortel Networks Corp’s wireless technology patents. [ID:nN17133547]
 Bombardier Inc (BBDb.TO) said it signed a nine-year contract giving Germany’s DB Regio AG the option to buy up to 200 lower-emission diesel locomotives for some 600 million euros ($867 million). The company’s stock ended down 1.88 percent at C$6.80.
 ($1=$0.97 Canadian)  (Reporting by John McCrank; editing by Peter Galloway)                                         

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