February 23, 2010 / 10:22 PM / 9 years ago

CANADA STOCKS-TSX tumbles as U.S. data spawns anxiety

* TSX falls 0.93 percent to 11,526.71

* U.S. housing, confidence data disappoint (Updates to close)

By Ka Yan Ng

TORONTO, Feb 23 (Reuters) - Toronto’s main stock index fell for a second straight session on Tuesday, knocked down by weak U.S. consumer confidence data that cast doubt on the strength of the economic recovery.

U.S. consumer confidence fell to a 10-month low in February, which added to skittishness about the economy that was spurred by numbers earlier in the day that showed U.S. home prices dipped unexpectedly in December. [ID:nN23102211]

Top heavyweight decliners came from the TSX’s three biggest sectors, financials, oil and gas, and materials. The trio accounts for about three-quarters of the index’s weighting. These sectors were also behind the market’s recent eight-day run of gains.

“We went down right off the get-go. We were due for a down day,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.

Royal Bank of Canada (RY.TO) fell 0.97 percent to C$56.05, while Suncor Energy (SU.TO) shed 2.2 percent to C$30.85. Cenovus Energy (CVE.TO) tumbled 3.4 percent to C$25.79, while Goldcorp (G.TO) lost 3.15 percent to C$38.45.

The downbeat U.S. data helped to weaken key commodity prices, which pressured the materials and energy groups. Both sectors were down sharply as oil broke a five-day rally to drop below $79 a barrel, while gold also lost ground. [O/R] [GOL/]

“U.S. consumer confidence caught the Street off guard,” said Francis Campeau, a broker at MF Global Canada in Montreal, noting that the German Ifo institute’s business sentiment index for February also came in lower than expected. [ID:nLDE61M0UN]

“Two very large economies had weaker than expected confidence, and that accelerated the selloff in commodities and financials,” Campeau said.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended 108.04 points, or 0.93 percent, lower at 11,526.71. Six of the index’s 10 main groups were lower.

The disappointing economic data added to an already-cautious mood ahead of U.S. Federal Reserve Chairman Ben Bernanke’s congressional testimony later this week.

Investors are seeking clarity on interest rates after the U.S. central bank recently raised its discount rate, which boosted speculation the Fed may hike its benchmark interest rate sooner than expected.

On the upside, TransCanada Corp (TRP.TO) was among top heavyweight gainers, rising 0.81 percent to C$34.93 despite reporting results that missed the profit forecasts and a delay in a key project.

However, the country’s biggest pipeline and power company did report a 38 rise in fourth-quarter earnings and raised its quarterly dividend. [ID:nN22211068]

$1=$1.06 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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