* TSX ends down 79.64 pts, or 0.6 pct, at 12,643.82
* Lowest close since Feb 21; down 0.6 pct on week
* Materials, energy issues weigh
* Gold has biggest weekly drop this year
* Spain deficit target stokes euro zone concern
By Jon Cook
TORONTO, March 2 Canadian stocks hit a
10-day low on Friday as resource issues slumped on weaker oil
and gold prices and as optimism over progress in Europe's debt
crisis faded after Spain set a deficit target bigger than
allowed by the euro zone's new fiscal pact.
Six of the TSX's 10 main sectors were lower, led by the
heavyweight materials and energy groups, which both slid more
than 1 percent.
"Oil is reversing course a little this week so that's
driving a little bit of the weakness in the TSX," said Craig
Fehr, Canadian market strategist at Edward Jones in St. Louis,
U.S. crude oil futures fell 2.3 percent a day after hitting
a 10-month high above $110 on supply concerns in the Middle
Canadian Natural Resources led the energy sector's
losses, falling 2.9 percent to C$36.33. Top producer Suncor
Energy declined 1.1 percent to C$35.45.
Countering the sector's slide, Progress Energy Resources
Corp rose 6.7 percent to C$11.50, after the natural gas
explorer signaled higher liquids production, prompting at least
one rating upgrade.
Gold producers were led lower by Barrick Gold, down
0.8 percent to C$46.87, and Kinross Gold, which was down
3.1 percent at 10.78, as bullion notched its biggest weekly drop
A drop in silver and copper prices hit Silver Wheaton
, which tumbled 2.9 percent to C$37.15, and Teck
Resources, down 2.6 percent at C$38.52.
The Toronto Stock Exchange's S&P/TSX composite index
finished down 79.64 points, or 0.6 percent, at
12,643.82, its lowest close since Feb. 21. The index was down
0.6 percent for the week.
"We look at how strong performance has been in the equities
markets so far in 2012 and it's reasonable to assume that you're
going to get these periods where, after strong gains, you get a
more choppy environment," added Fehr.
The European Central Bank's move to inject 500 billion euros
($660.25 billion) in cheap, 3-year loans into the banking system
this week had increased risk sentiment, but doubts returned on
Friday after Spain set a softer 2012 deficit target than one
agreed under the euro zone's austerity drive.
"You're having a few second sober thoughts about some of the
issues that continue to lie ahead," said Robert Gorman, chief
portfolio strategist at TD Waterhouse.
Canadian financial shares were down 0.4 percent, despite
bank earnings this week that beat analyst estimates. Royal Bank
of Canada, the country's largest bank, was the biggest
drag, falling 0.7 percent to C$56.40. On Thursday, RBC's shares
jumped 2 percent after its quarterly profit beat expectations
and it increased its dividend.
National Bank of Canada shares rose 1.1 percent to
C$78.32 a day after the No. 6 bank reported its quarterly profit
rose 3.1 percent.
Financials weren't helped by data on Friday that showed
Canada's economic growth slowed markedly in the final quarter of
"It's going to continue to be a recovery that progresses at
a relatively moderate rate," said Fehr.
In other news, shares of Sears Canada Inc surged
almost 7 percent to C$13.04 after the retailer said on Friday it
will shut three major downtown stores in Vancouver, Calgary and
Ottawa, in a move that will allow it to raise capital to revamp
stores in other locations.