CANADA STOCKS-Loblaw surges but TSX drops slightly as TD slips

Thu Dec 6, 2012 5:19pm EST

* TSX falls 6.16 points, or 0.05 percent, to 12,151.13
    * Four of 10 main index sectors decline
    * TD down 1.8 percent on acquisition risk, results
    * Loblaw shares up 13.7 percent on REIT plans

    By John Tilak
    TORONTO, Dec 6 (Reuters) - Canada's main equity index
slipped on Thursday as investor concern about flat quarterly
results from Toronto-Dominion Bank and about its latest
U.S. acquisition offset a 14-percent jump in Loblaw Cos Ltd
 on the grocer's plan to spin off its real estate assets.
    The market was also hurt by bleak comments from the European
Central Bank about the outlook for the region, as well as by
continuing distress over the still-unresolved U.S. fiscal
crisis. 
    Shares of Toronto-Dominion, the country's second-biggest
bank, ended 1.8 percent lower at C$81.12 after it said it is
buying the owner of Epoch Investment Partners for $668 million
in cash to expand its U.S. asset management business. It also
reported a flat quarterly profit that spurred market concern
over the bank's higher expenses and loan loss provisions.
 
    TD was the index's biggest heavyweight decliner.
    "TD has been a laggard of all the banks this year. People
were expecting more. There is nothing to write home about the
results," said Irwin Michael, portfolio manager at ABC Funds.
    Shares in Canadian Imperial Bank of Commerce and
National Bank of Canada also slipped after they reported
quarterly earnings on Thursday.  
    The financial sector, the index's biggest, dropped 0.6
percent, while the energy sector slipped 0.2 percent, hurt by
falling oil prices. Brent January crude fell $1.78 a
barrel to $107.03. 
    Suncor Energy Inc lost 0.6 percent to C$32.48,
Cenovus Energy Inc fell 0.7 percent to C$33.21, and
Encana Corp was down 1.3 percent at C$21.25. 
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 6.16 points, or 0.05 percent, at 12,151.13.
Four of its 10 main sectors closed lower.
    The weakness was tempered by Loblaw, the country's largest
grocer, which said it would create one of Canada's biggest real
estate investment trusts to hold a big chunk of its properties
and would sell units in it through an initial public offering.
 
    The stock rose 13.7 percent to C$38.20, having hit a 52-week
high of C$42.05 earlier in the session. Loblaw parent George
Weston Ltd gained 6.7 percent to C$67.71. The consumer
staples sector advanced 1.2 percent.
    "The market is probably right here about being
enthusiastic," said John Ing, president of Maison Placements
Canada.
    "It is a smart deal for them. This is a good way of
utilizing an underutilized asset," he said of Loblaw's plan to
unlock the value of the prime real estate it owns across the
country.
    Shares of Canadian Tire Corp, another owner of
prime retail real estate, were up 2.3 percent at C$67.31, while
coffee chain Tim Hortons Inc rose 2.5 percent to
C$46.52. 
    Lululemon Athletica Inc gained 7.1 percent to
C$72.89 after the yogawear retailer's earnings beat expectations
and it laid out a more detailed plan to expand internationally.
 
    The European Central Bank held interest rates steady on
Thursday but President Mario Draghi revealed that officials had
pondered a cut and predicted the euro zone economy would shrink
again in 2013. 
    "The fact that they are considering an interest rate cut
tells us the economy appears to be in recession. They're going
to have to keep on pumping the system with more supply of funds
until confidence is restored," ABC's Michael said.
FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article