August 18, 2011 / 2:59 PM / 6 years ago

CANADA STOCKS-TSX tumbles as economic and European fears rise

 *TSX down 292.30 points, or 2.3 pct, at 12,287.31
 *All 10 main index sectors drop; gold subsector up 0.6 pct
 (Updates with details, comments)
 By Claire Sibonney
 TORONTO, Aug 18 (Reuters) - Toronto's main stock market
index sold off nearly 3 percent on Thursday morning as mounting
worries about a sluggish global economic recovery and fears
that the European debt crisis might spread to the U.S. banking
sector shook confidence.
 All 10 index sectors were down sharply, but weighty
safe-haven gold miners edged up 0.6 percent as bullion prices
hit a record high, helping the TSX index outperform its U.S.
counterparts. [.N] [GOL/]
 Most other commodities, such as oil, fell hard. [O/R]
  Among the heaviest decliners, Suncor Energy SU.TO
dropped almost 5 percent to C$30.15, Toronto-Dominion Bank
TD.TO fell 2.5 percent to C$74.61, and Canadian Natural
Resources CNQ.TO lost 4.4 percent to C$34.57.
  European equity markets also fell sharply as renewed
worries about Europe's debt crisis and sour U.S. data added to
fears that major economies were close to recession.
  There was a slew of disappointing U.S. data on Thursday
morning, including jobless claims, inflation, home sales and
business conditions. [nN1E77H0E8]
 "With Europe being off as badly as it is, it's unsurprising
that we're getting similar weakness here in the North American
market," said Gavin Graham, president of Graham Investment
 "You've got the continuing worries over the European debt
situation and its effect on the European banking and credit but
at the same time, what you're having is continued reinforcement
of the weakness of the U.S. economy."
 Graham noted that recent strong earnings results from U.S.
retailers does not mean sales are strong, or that companies are
  A report in the the Wall Street Journal that regulators
were intensifying their review of European banks' U.S. units
also helped unnerve investors. The report said the Federal
Reserve Bank of New York has asked for more information about
whether the banks have reliable access to funds needed to
operate. [nL5E7JI0Q]
   At 10:28 a.m. (1428 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 292.30 points, or
2.3 percent, at 12,287.31. Earlier it had dropped almost 3
percent to its weakest level since Aug. 11.
 "I don't think this is a one-day wonder here that we've
got," said Fred Ketchen, director of equity trading at
 "I think that we are in a weak market, and the weak market
will show some signs of modest recovery somewhere along the
way, but until ... it becomes a little bit more evident that
things are settling down or trying to turn around and improve,
I think that we are in for these kinds of days."
 Among the top gainers on the index, Yamana Gold YRI.TO
rallied 3.1 percent to C$15.67, Agnico Eagle AEM.TO added 1.6
percent to C$63.65, and New Gold NGD.TO rose 3 percent to
 ($1=$0.99 Canadian)
 (With additional reporting by Trish Nixon; editing by Peter

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