CANADA STOCKS-TSX drops to near 1-month low on U.S. growth, Fed fears

Wed Jun 5, 2013 5:27pm EDT

* TSX falls 150.32 points, or 1.19 percent, to 12,443.65
    * All 10 main sectors decline
    * Penn West slips after restructuring plans
    * Gold shares rise after bullion price jump

    By John Tilak
    TORONTO, June 5 (Reuters) - Canada's main stock index
recorded one of its steepest one-day percentage falls of the
year on Wednesday due to concerns about U.S. economic growth,
sluggish hiring, and renewed fears of a stimulus pullback.
    The declines took the market to a one-month low, with
weakness in almost all key sectors, and helped erase almost all
the gains the index has made this year.
    The lone bright spot was the gold sector, which climbed
after the soft data fueled a rise in the price of bullion.
 
    U.S. companies picked up the pace of hiring in May, but job
growth remained sluggish and fell short of economists'
expectations as the goods-producing sector shed payrolls,
according a private sector report. 
    The report followed a slew of unimpressive data this week
and suggested that the economic recovery might be hitting some
road bumps.
    "The market's catching up to some of the softer economic
numbers," said Youssef Zohny, portfolio manager at Stenner
Investment Partners, a unit of Richardson GMP. 
    "Economic numbers are coming in a bit weaker than expected,
and it seems maybe that markets moved too far ahead of the
economy in the short term," he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 150.32 points, or 1.19 percent, at
12,443.65, falling earlier to 12,422.39, its lowest since May 7.
    Investors also worried about whether the U.S. Federal
Reserve will start scaling back its massive stimulus program. A
central bank report said the U.S. economy expanded at a "modest
to moderate" pace since mid-April while hiring remained
relatively subdued. 
    "The market is still in a fairly unsettled state, trying to
determine where we are and where we're going" said Fred Ketchen,
director of equity trading at ScotiaMcLeod.
    "The stimulus can't go on forever," he added. "Enjoy it
while it's there, but it isn't going to last forever."
    All of the 10 main sectors on the index were in the red.
    Financials, the index's most heavily weighted sector, gave
back 1.3 percent.
    Royal Bank of Canada, the country's biggest bank,
lost 1.1 percent to C$60.53.
    Shares of energy producers fell 1.3 percent.
    Penn West Petroleum Ltd named a former Marathon Oil
Corp executive as chief executive and said it would
slash its dividend, cut 10 percent of its staff and review
strategic options, such as asset divestments and joint ventures.
Penn West shares fell 4.1 percent. 
    The materials group, which includes mining stocks, slipped
despite a 0.7 percent rise in shares of gold companies.
    Barrick Gold Corp was up 0.8 percent at C$21.76.
    Centerra Gold Inc rose 16.9 percent to C$4.98 after
Kyrgyzstan's parliament set a new Sept. 10 deadline for the
government to agree to an improved deal with the miner or
unilaterally cancel the current arrangement.
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