CANADA STOCKS-Oil's drop, Fed fears yank TSX to one-week low

Fri Jul 26, 2013 5:14pm EDT

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* TSX falls 21.24 points, or 0.17 percent, to 12,647.90
    * Six of the 10 main index sectors decline
    * Canadian Natural tumbles on lower oil price
    * Gold miners up; Goldcorp is biggest positive influence
    * TransCanada little changed after quarterly results

    By John Tilak
    TORONTO, July 26 (Reuters) - Canada's main stock index hit a
one-week low on Friday with falling oil prices fueling a decline
in shares of energy producers and a Federal Reserve meeting next
week reviving worries about the fate of the U.S. central bank's
stimulus program.
    The Toronto market fell for a fourth consecutive session and
declined on the week after four straight weeks of gains.
    The price of oil slipped as more concerns over waning
Chinese demand emerged after the world's second-largest oil
consumer ordered companies across 19 industries to close
outdated capacity by the end of September. 
    The return of Fed fears and choppy trading in bullion
ensured a volatile session for gold miners. They turned higher
after back-and-forth trading all day.
    Focus was on the Fed's policy meeting next week, with the
market again uneasy that the Fed might dial back its stimulus
program sharply. 
    "Given Bernanke has been toning it down, I suspect we'll see
a pretty dovish statement," said Lorne Steinberg, president of
Lorne Steinberg Wealth Management. 
    "I think the market will be happy with the Fed statement,
which to me is only temporarily postponing the inevitable
(pullback of stimulus)."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 21.24 points, or 0.17 percent, at
12,647.90, after touching 12,614.56, its lowest point since July
18. 
    The index is barely up this year. Sentiment for Canadian
stocks has taken a hit as volatile commodity prices and concerns
about economic growth have kept investors away. 
    "The Canadian economy is going to be flatlining to showing
plus 1 percent (growth) over the next 12 to 18 months,"
Steinberg said. "We find the Canadian stock market to be trading
at relatively inflated valuations based on what we can buy
elsewhere."
    Six of the 10 main sectors on the index were in the red.
    Energy shares fell 1.1 percent, mirroring weaker oil prices.
In the group, Canadian Natural Resources was down 4.5
percent at C$32.20 and played the biggest role of any single
stock in driving the index lower. 
    TransCanada Corp ended little changed after
Canada's No. 2 pipeline operator reported a 34 percent jump in
second-quarter profit due to higher prices in its
power-generation business. 
    The materials sector, which includes mining stocks, rose 0.9
percent. 
    Gold miners jumped. Goldcorp Inc rose 2.2 percent to
C$29.48 and had the biggest positive influence on the index.
Barrick Gold Corp was up 1.8 percent at C$18.28.
    But fertilizer producer Potash Corp fell 0.6 percent to
C$38.14. The stock was hit by a number of price-target cuts from
analysts on Friday after the company released quarterly results
on Thursday that fell short of expectations. It also cut its
outlook. 
    Financials, the index's most heavily weighted sector, lost
0.1 percent. Manulife Financial Corp fell 0.9 percent
to C$18.30.
    Celestica Inc reported a 19 percent rise in
second-quarter profit on Friday, driven mainly by growth in its
communications business. Shares of the contract
electronics manufacturer jumped 6.3 percent to C$10.40.
    Shares of Canfor Corp rose 7.4 percent to C$21.45
after the lumber producer reported a second-quarter profit late
Thursday that topped market expectations.
FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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