By Jennifer Kwan
TORONTO (Reuters) - Toronto's main stock index
closed sharply lower Tuesday as Bank of Montreal's results
came in below market expectations and concerns over domestic
growth and the global recovery pressured commodity prices.
The TSX's key financial sector led the slide, dropping 2.9
percent, its steepest percentage loss in two months.
Bank of Montreal, the top net loser, said its
quarterly profit climbed 20 percent as it set aside much less
money for bad loans, but it missed market expectations as
trading income dived. BMO shares fell 6 percent to C$55.50.
"BMO had been one of fastest movers and best performers in
the last two quarters so it had risen high. People had
reasonable expectations," said John Stephenson, senior
vice-president at First Asset Investment Management Inc.
"They expected a reasonably in-line quarter so it was a
The market worried that other Canadian banks could report
similar results and pushed their shares down.
Canadian Imperial Bank of Commerce fell 2 percent,
National Bank of Canada dropped 3 percent, while Royal
Bank of Canada slid 3 percent. Bank of Nova Scotia
fell 2.8 percent and Toronto-Dominion Bank was
lower by 1.7 percent.
The Toronto Stock Exchange's S&P/TSX composite index
finished the day down 161.28 points, or 1.4 percent,
at 11,557.35, its lowest closing level in a week.
The blue chip S&P/TSX 60 index closed 10.44 points
lower, or 1.53 percent, at 672.60.
Even without the disappointing results from BMO, the market
would have fallen along with global markets on worries about
the economic recovery, analysts said.
Six of the TSX's 10 main sectors were lower, with resource
issues weighing heavily as the price of oil and base metals
fell on recovery fears.
Suncor Energy dropped 1.4 percent and Teck
Resources sank 3 percent.
U.S. and Canadian economic data on Tuesday did little to
lift investor spirits. Sales of previously owned U.S. homes
took a record drop in July to 15-year lows, suggesting further
loss of momentum in the economic recovery.
"All the economic data is saying one thing: slow recovery,
possibly double dip, although unlikely," said Stephenson. "And
if growth is slow, why own stocks. Why do you want a slice of
pie of future earnings if they aren't going to grow?"
In Canada, data showed retail sales rose less than expected
in June, sending the Canadian dollar sharply lower.
Potash Corp fell for the first time seven days,
ending down 0.23 percent at C$157.80. The stock had been pushed
up on market speculation it would attract a higher takeover bid
from BHP Billiton, or possibly another player.
BHP has offered about $39 billion, or $130 a share, for
(Reporting by Jennifer Kwan)