CANADA STOCKS-Fed fears pull TSX lower; banks lead retreat

Fri Jun 14, 2013 5:10pm EDT

* TSX falls 89.77 points, or 0.73 percent, to 12,187.36
    * Nine of 10 main index sectors decline
    * Financial stocks lead the fall on stimulus concerns
    * Grocery chain Metro gains 2 percent
    * Sears Canada gains almost 14 percent

    By Peter N Henderson
    TORONTO, June 14 (Reuters) - Canada's main stock index
retreated on Friday, ending its third-straight losing week as
financials and materials stocks led a broad selloff.
    Bank shares were the biggest drag on the index as investors
digested U.S. economic data and fretted about a possible
rollback in central bank stimulus programs.
    The index fell following a sharp jump in the previous
session and remained firmly in the red for the year.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 89.77 points, or 0.73 percent, at
12,187.36. Nine of the 10 TSX subgroups lost ground.
    Financials, the index's most heavily weighted sector, lost
0.74 percent. Toronto-Dominion Bank played the biggest
role in leading the index lower, dropping 1.1 percent to $81.32.
Royal Bank of Canada, the country's biggest lender, fell
0.94 percent, ending the week at C$59.99.
    The materials sector, which includes mining stocks, declined
1.58 percent. The price of gold rose on Friday and ended the
week above its Monday open, but gold-mining stocks still
suffered. Goldcorp Inc. was down almost 2.5 percent at  
C$28.21, and Kinross Gold fell 3.1 percent to C$5.92.
 
    "It seems that this market, when it gets a bit nervous, they
go in and whack the financials and the materials," said David
Cockfield, portfolio manager at Northland Wealth Management.
"Gold is up but gold stocks are down. The market is continuing
to exhibit all sort of characteristics that are less than
rational."
    U.S. producer prices rose more than expected in May as
gasoline and food prices rebounded, but underlying inflation
pressures remained muted, which could argue against an early
scaling back of monetary stimulus by the U.S. Federal Reserve.
 
    Fed officials will meet on Tuesday and Wednesday to discuss
the future of the central bank's $85 billion a month bond-buying
program.
    Grocery giant Metro had the biggest positive
influence on the market, gaining 2.15 percent to close at      
C$68.84. Earlier this week rival grocer Empire, owner
of the Sobeys chain, bid to acquire American chain Safeway's
Canadian operation. 
    Department store chain Sears Canada Inc. rose almost 14
percent to C$10.76 on news the company will close at least two
and perhaps more of its prime Toronto locations, selling back
the leases for C$191 million.
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