CANADA STOCKS-TSX falls on Canadian Natural plans, energy selloff

Tue Dec 4, 2012 5:17pm EST

* TSX falls 32.56 points, or 0.27 pct, to 12,137.18
    * Canadian Natural off 2 pct after outlook fails to impress
    * Energy sector broadly falls, miners eke out gains
    * Market frets as U.S. budget negotiations drag on

    By John Tilak
    TORONTO, Dec 4 (Reuters) - Canadian stocks fell on Tuesday
as investors punished oil company Canadian Natural Resources Ltd
 for its production and spending plans with the stock
leading a broad decline in resource shares as gold and oil
prices fell on worries about the U.S. fiscal cliff.
    Shares of Canadian Natural fell 2 percent to C$27.60 despite
a bullish price forecast for the company's oil-sands crude, as
investors had expected more substantial production growth,
analysts said. 
    "Evidently the market felt that was a little disappointing,"
said Gavin Graham, president of Graham Investment Strategy. 
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 32.56 points, or 0.27 percent, at
12,137.18. Seven of its 10 main sectors declined.
    The energy sector fell more than 1 percent, the biggest
sectoral weight on the index, as oil prices dipped. Among
oil companies, Encana Corp was down 2.1 percent at
C$21.17, and Nexen Inc fell 2 percent to C$24.17.
    ShawCor Ltd also dragged. The energy services
company shed 14.1 percent to C$39.47 after it said it was
unlikely to sell itself following a review of strategic
alternatives it had undertaken. 
    "You're seeing a combination of micro, company-specific
issues and macroeconomic issues putting pressure on the energy
sector," said Craig Fehr, Canadian market strategist at Edward
Jones in Missouri.
    "Investors are looking at the global growth story, realizing
that it's continuing to weigh on external demand, particularly
for resource exports that will come out of Canada," he said.
     The broad concern for investors was the risk that U.S.
politicians would fail to reach a deal to prevent automatic
government spending cuts and tax increases in early 2013 from
tipping the economy back into recession.
    President Barack Obama said on Tuesday there is not enough
time this year to come up with an overhaul of the U.S. tax
system and entitlement programs that Republicans want as a
condition for an agreement to avoid the so-called fiscal cliff.
 
    "It's as bad as the NHL hockey discussions. Both sides have
hardened their positions when there were expectations of hope,"
said John Ing, president of Maison Placements Canada.
    "They're running out of time. There is maybe a week left
before something meaningful can be done. It is a worry," he
added.
    Bank of Montreal gained 0.6 percent to C$59.63
after Canada's fourth-largest lender reported a 41 percent rise
in quarterly profit, topping estimates, as wholesale banking
income doubled and loan-loss provisions plunged. 
    Goldcorp Inc was up 1.5 percent at C$37.85 and fellow
gold miner Barrick Gold Corp rose 1 percent to C$33.94,
helping the index's materials sector, which includes mining
companies, to advance 0.2 percent despite bullion prices hitting
a one-month low.
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