* TSX closes down 27.58 points, or 0.21 percent, at
* Banks lead gains, while energy and railway stocks weigh
By Alastair Sharp
TORONTO, Oct 28 Canada's main stock index closed
lower on Monday after briefly reaching a two-year high, weighed
down by several heavyweight energy and mining stocks as well as
a retreat by the country's two main railways.
Offsetting those declines, the country's largest banks
turned in another positive performance. Financial stocks have
jumped in recent weeks as investors grew more confident that the
U.S. Federal Reserve will stick with its monetary stimulus for
"If you have an optimistic outlook for the North American
economy, they (Canadian banks) are still attractively priced,"
said Barry Schwartz, a portfolio manager at Baskin Financial
"We're in a slow growth but steady-as-she-goes economy and
there will be pockets of fantastic strength and areas of
weakness," he said, suggesting resource stocks could still
Some of the country's heavyweight mining and energy stocks
slipped on the day, with Canadian Natural Resources off
1.9 percent at C$32.69 and Suncor Energy Inc down 0.5
percent at C$37.46. Energy stocks have risen some 13 percent
from a trough in June.
The two main railways both slipped, with Canadian National
Railway Co down 1 percent at C$114.03 and Canadian
Pacific Railway Ltd off 1.3 percent at C$148.17. The
pair are still sharply higher than before they posted solid
earnings results last week.
Canadian National said on Monday it is still talking with
the union representing about 3,300 conductors and other workers
and expects the two sides will be able to avoid a strike.
Valeant Pharmaceuticals International Inc slipped
1.9 percent to C$115.34 after it agreed to pay $142.5 million in
a settlement with Anacor Pharmaceuticals.
The Toronto Stock Exchange's S&P/TSX composite index
closed down 27.58 points, or 0.21 percent, at
It is still, however, at levels last seen in July 2011,
having added 5 percent so far this month.
"We've had a heck of a move already this month in North
American markets, particularly in Canada," said Irwin Michael, a
portfolio manager at ABC Funds. "There doesn't appear to be a
lot of fear right now. It's complacency."
Materials stocks were mixed, with Teck Resources
down 2 percent at C$29.76 and Goldcorp Inc up 1.2 percent
Potash Corp gained 1 percent to C$32.93 after rival
fertilizer producer Mosaic Co said it would buy the
phosphate business of CF Industries Holding Inc for $1.2
Meanwhile, banks provided much of the positive impact, with
Bank of Nova Scotia adding 0.8 percent to C$62.87 and
Royal Bank of Canada up 0.2 percent at C$69.61.
ABC's Irwin said that the index could yet trade higher by
the end of the year, but that a shock between now and then was
"I do think the market will end the year higher than where
it is today, but from now until then I suspect we are due for a
correction and I think it will be quite healthy for the
marketplace," he said.