* TSX falls 121.01 points, or 0.98 percent, to 12,240.19
* All 10 sectors lower, led by energy shares
* Agrium drops nearly 10 percent
By Claire Sibonney and John Tilak
TORONTO, Nov 7 Canada's main stock index slumped
to a near two-week low on Wednesday, dragged down by the energy
sector, as the market wondered if newly re-elected U.S.
President Barack Obama could tackle the significant economic
challenges facing the country.
While Obama promised to reach across the aisle to address
these issues, investors were skeptical of a speedy resolution on
the "fiscal cliff" - a mix of tax increases and spending cuts
due to extract some $600 billion from the economy starting Jan.
1 barring a deal.
"Now that the distraction of the U.S. elections is over,
investors are again focusing on the two biggest threats to
global growth - the U.S. fiscal cliff and the euro zone
situation," said Elvis Picardo, strategist and vice president of
research at Global Securities.
The fiscal cliff "is a huge concern. There doesn't seem to
be any indication of a near-term solution," he said.
At midafternoon, the Toronto Stock Exchange's S&P/TSX
composite index was down 121.01 points, or 0.98
percent, at 12,240.19. The index, which hit its lowest level
since Sept. 25, at one point fell to 12,201.87. All the main
subgroups were down.
Leading the decline was the energy subgroup, which fell 1.92
percent on a day when oil prices were down.
Suncor Energy Inc fell 2.69 percent to C$33.66 and
Canadian Natural Resources Ltd was down 3.11 percent at
"Temporarily you're going to see weakening demand for
commodities. And that's being reflected in the market today,"
said Michael Sprung, president at Sprung Investment Management.
Though the United States could eventually approve the
Keystone pipeline, having the Democrats in power may push it
further into the future, Sprung said.
Weighing on broader sentiment, European Central Bank
President Mario Draghi underscored the weakness in Europe's
economy. Some Canadian earnings reports also
dampened the mood.
One of the heaviest decliners on the index was fertilizer
producer Agrium Inc, down nearly 10 percent at C$96.30,
after it reported lower quarterly profit due to downtime at its
potash mine and dragged-out contract talks with China and India.
Bombardier Inc dropped 3.6 percent to C$3.48 after
it said it would delay by about six months the first flight of
its C-Series jetliner because of issues related to suppliers,
and that it would cut about 1,200 jobs in its train
Enbridge Inc was down 1.37 percent at C$39.54.
Canada's second-largest pipeline company reported a
third-quarter profit as losses on financial derivatives fell and
it carried more oil and natural gas on some of its pipelines.
However, shares of Franco-Nevada Corp were up 4.62
percent at C$58.64 after the gold-focused royalty company said
on Tuesday it would buy an 11.7 percent net royalty interest in
an oil field in Saskatchewan from Penn West Petroleum Ltd
for C$400 million in cash.