* TSX falls 53.52 points, or 0.45 percent, to 11,951.90
* Five of 10 main index sectors decline
* Telecom stocks drop 5.4 percent on Verizon fears
* Gold miners down 6.2 percent on bullion's fall
By John Tilak
TORONTO, June 26 Canada's main stock index
stumbled on Wednesday after telecoms stocks suffered deep losses
on reports that U.S. giant Verizon Communications Inc is
looking to enter the market, while gold miners shares were
pummeled as bullion prices tumbled.
Weakness in the two sectors more than offset gains in
financial shares after U.S. data helped calm fears of a rollback
in economic stimulus programs.
Revised figures showed U.S. economic growth in the first
quarter was slower than first reported, held back by a moderate
pace of consumer spending, weak business investment and
Reports that Verizon has offered to buy Canadian startup
Wind Mobile and is also in talks with rival startup Mobilicity
pulled telecoms shares down 5.4 percent.
"Verizon is a monster," said Lorne Steinberg, president of
Lorne Steinberg Wealth Management. "They would have a huge
negative impact on the incumbents."
Verizon is a far larger company than any of the three
companies - BCE Inc, Telus Corp, and Rogers
Communications Inc - that now dominate the Canadian
telecoms market, he added. "This would bring down the pricing
and hurt the margins even if market shares did not change."
He said the move would be similar to Wal-Mart Stores Inc's
entry to Canada in 1994, which shook up the retailing
The three big Canadian telecoms companies all fell hard. BCE
lost 4 percent to C$41.57, Telus fell 8 percent to $30.70, and
Rogers Communications was down 9.2 percent at C$41.67. The three
played a major role in the index's fall.
The Toronto Stock Exchange's S&P/TSX composite index
closed down 53.52 points, or 0.45 percent, at
11,951.90. The benchmark Canadian index, which had jumped 1.4
percent in the previous session, is down 3.9 percent since the
start of the year.
"We don't see any significant improvement in the TSX one
year from now," Steinberg said. "We see Canada still having some
downside from here."
Five of the 10 main sectors on the index were in the red.
The materials sector, which includes mining stocks, gave
back 2.9 percent. Shares of gold producers fell 6.2 percent as
the bullion price dropped to a near three-year low.
"People are panicking. Gold has to go through a bottoming
process," said Sal Masionis, a stockbroker at Brant Securities.
He expects the commodity to fall another $100 before a possible
Barrick Gold Corp fell 8.3 percent to C$15.50, and
Goldcorp Inc was down 4.9 percent at C$23.40.
Financials, the index's most heavily weighted sector, were
up 0.7 percent. Royal Bank of Canada, the country's
biggest lender, climbed 1.4 percent to C$60.96, and
Toronto-Dominion Bank added 0.8 percent to C$83.42.