TSX drops for third day as jitters gain the upper hand
By John Tilak TORONTO (Reuters) - Canada's main stock index fell sharply on Monday, retreating for a third straight session, as increasing nervousness about the durability of recent market gains joined with sluggish commodity prices to drag down most of the index's major sectors. Stock markets also were still digesting disappointment over Friday's U.S. labor market data, which showed a gain in jobs in March that fell short of market expectations. Uncertainty about what the jobs figures would mean for Federal Reserve policy and the timing of any U.S. interest rate rise boosted market volatility, fueling a selloff in U.S. stocks, and undermining the Canadian market, where insurers were hit hard for a second straight session. The S&P/TSX VIX index <.GSPVIXC>, which gives a glimpse of the level of market volatility, shot up 15 percent. "It's the spillover effect of weakness in the United States," said Elvis Picardo, a strategist at Global Securities in Vancouver. "It certainly seems like we're going to be in for a sustained period of more volatility." Investors can no longer expect weeks to go by without any significant decline, he added. "Those days are over." The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed down 122.77 points, or 0.85 percent, at 14,270.33. The benchmark index is up about 4.8 percent this year. "If the market drops 6 percent or more, this is a huge buying opportunity," said John Stephenson, senior vice president and portfolio manager at First Asset Investment Management. He added that he does not expect a major correction, however. "I don't think the market will drop more than 3 or 4 percent, either the TSX or the S&P 500." Eight of the 10 main sectors on the Canadian index were in the red on Monday. Financials, the index's most heavily weighted sector, were down 0.4 percent. Manulife Financial Corp gave back 2.2 percent to C$20.79, and Sun Life Financial Inc lost 2.3 percent to C$36.50. Oil prices dropped, dragging down shares of energy companies. In the group, Canadian Natural Resources Ltd fell 0.8 percent to C$43.30. The materials sector, which includes mining stocks, declined 0.8 percent. Barrick Gold Corp shed 0.8 percent to C$20.14. But some stocks benefited from a gain in the price of copper. Shares of diversified miner Teck Resources Ltd jumped 1.2 percent to C$24.72. Potash Corp of Saskatchewan Inc said on Sunday that former Inmet Mining Corp boss Jochen Tilk would become the world's biggest fertilizer company's next chief executive officer, replacing Bill Doyle. Potash shares fell 1.9 percent to C$37.11. Magna International Inc said it will end compensation to Frank Stronach at the end of this year, after paying $52 million in consulting fees to the company's billionaire founder in 2013. Shares of the auto parts maker gave back 2.2 percent to C$104.81. ($1=$1.10 Canadian) (Editing by Peter Galloway)
