CORRECTED-CANADA STOCKS-TSX slips as TD weakness offsets Loblaw surge

Thu Dec 13, 2012 12:33pm EST

(Corrects name of executive and company in 15th paragraph)
    * TSX falls 17.03 points, or 0.14 percent, to 12,140.26
    * Five of 10 main sectors decline
    * TD down 2 percent on concerns about acquisition risk,
results
    * Loblaw shares up 16 percent on REIT venture plans

    By John Tilak
    TORONTO, Dec 6 (Reuters) - Canadian stocks fell on Thursday
as investor concerns about Toronto-Dominion Bank's 
latest U.S. acquisition and results offset a 16-percent jump in
Loblaw Cos Ltd on the grocer's plan to spin off its
property holdings.
    The market was also hurt by bleak comments from the European
Central Bank about the outlook for the region, as well as
renewed distress about the still-unresolved U.S. fiscal crisis.
    Toronto-Dominion said it is buying the owner of Epoch
Investment Partners for $668 million in cash to expand its U.S.
asset management business, while it reported a flat quarterly
profit. 
    The country's second-biggest bank was down 2 percent at
C$80.89, playing the biggest role of any single stock in leading
the market lower. Its shares fell on worries about higher
expenses and loan loss provisions, as well as added caution
attached to its bid for Epoch.
    "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
earnings on Thursday.
    The financial sector, the index's biggest, dropped 0.8
percent.
    The energy sector was down 0.4 percent, hurt by falling oil
prices. Brent January crude fell 2 percent to $106.72.
 
    Suncor Energy Inc gave back 0.89 percent to C$32.38,
Cenovus Energy Inc lost 1 percent to trade at C$33.11,
and Encana Corp was down 1.2 percent at C$21.27. 
    At midafternoon, Toronto Stock Exchange's S&P/TSX composite
index was down 17.03 points, or 0.14 percent, at
12,140.26. Five of the 10 main sectors on the index were trading
lower.
    The European Central Bank held interest rates steady on
Thursday but President Mario Draghi revealed officials 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," Michael said.
    The Canadian market's weakness was tempered by Loblaw, the
country's largest grocer, which said it would create one of
Canada's largest real estate investment trusts to hold a
significant part of its property assets and sell units through
an initial public offering. 
    The stock rose to C$38.91, having hit a 52-week high of
C$42.05 earlier in the session. Loblaw parent George Weston Ltd
 gained 7.8 percent to C$68.35. The consumer staples
sector advanced 1.6 percent.
    "The market is probably right here about being
enthusiastic," said John Kinsey, portfolio manager at Caldwell
Securities.
    "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 2.8 percent at C$67.67, while
coffee chain Tim Hortons Inc rose 2 percent to C$46.34.
    The materials sector, which includes mining stocks, also
provided some support, rising 0.2 percent. Teck Resources Ltd
 was up 2.3 percent at C$35.

 (Additional reporting by Cameron French; Editing by Jeffrey
Hodgson and James Dalgleish)
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