* TSX down 63.43 pts, or 0.5 pct, at 12,335.26
* Touches lowest level since Jan. 18
* U.S. retail data hurts materials
* Moody's euro zone downgrades weaken sentiment
By Jon Cook
TORONTO, Feb 14 (Reuters) - Canadian stocks touched their lowest point in nearly a month on Tuesday morning with mining and energy issues leading the way, hit by weak U.S. retail sales data and a fresh round of euro zone credit downgrades.
Investor confidence in the U.S. economy took a step back after data showed retail sales rose less than forecast in January as consumers cut back on car purchases and did less online shopping.
U.S. consumers have been increasingly focused on paying down debt since the recession, said Robert Gorman, chief portfolio strategist at TD Waterhouse.
The bigger picture is one of a "fairly cautious consumer, tending to focus on the basic goods and services as opposed to the big-ticket items," he said.
The U.S. figures had an immediate impact on resource issues with the index's heavyweight materials group falling 1 percent. In the sector, diversified miner Teck Resources slid 1.6 percent to C$38.69, hit by another drop in copper prices.
Also in the materials group, fertilizer producer Potash Corp dropped 1.2 percent to C$44.12.
Declines in oil and gas producers were led by Canadian Natural Resources, which tumbled nearly 4 percent to C$36.69 after the company said its Horizon oil sands upgrader in northern Alberta would be shut down for several weeks longer than expected to repair a processing unit.
At 11:07 a.m. (1607 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 63.43 points, or 0.5 percent, at 12,335.26. Earlier it fell as low as 12,324.23, its weakest level since Jan. 18.
Financials were also down, falling 0.6 percent. Royal Bank of Canada dropped 0.6 percent to C$53.36, while Bank of Nova Scotia fell 0.3 percent to C$52.30.
Market optimism spurred by Greece's approval on Sunday of painful austerity measures to secure another bailout was shortlived as credit rating agency Moody's put the United Kingdom's triple-A rating in jeopardy for the first time late Monday and warned it may cut France and Austria as well.
"It was a shot across the bow," said Gorman of the Moody's warnings.
Not all the news was negative for the market, as German data suggested that Europe's bulwark economy is picking up speed and a strong Italian bond sale added to signs that financing pressures were being contained.
Also a report by the Conference Board of Canada said on Tuesday that signs of a U.S. economic comeback lifted the outlook for Canadian corporate profitability in December and January, halting a five-month slide.
The research organization's leading indicator of industry profitability index climbed 0.04 percent in December and 0.07 percent in January, according to revised figures.