Newspaper article The Canadian Press

TSX Moves Lower as Concerns over Spain, U.S. Economy Grab Attention

Newspaper article The Canadian Press

TSX Moves Lower as Concerns over Spain, U.S. Economy Grab Attention

Article excerpt

Toronto stock market drops on economic news

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TORONTO - The Toronto stock market ended the session lower Friday as concern about Spain's debt and disappointing economic data out of the United States kept traders cautious.

The S&P/TSX composite index moved down 21.39 points to 12,317.46, ending the week half a per cent lower than a week ago. The TSX Venture Exchange crept up 12.20 points to 1,334.51.

The Canadian dollar slid 0.24 of a cent to 101.71 cents US.

A report from the U.S. Commerce Department showed that Americans spent more in August even though their incomes barely grew. But the spending increase was driven by higher gasoline prices.

Investors were cautious over Spain, a day after the country's government announced big spending cuts it hopes will convince potential bailout creditors and investors it has a rock-solid plan to heal its public finances.

The Bank of Spain released an audit Friday showing that seven of the country's banks failed stress tests. Moody's, the credit rating agency, is also expected to weigh in on Spain's creditworthiness, and there are concerns the government's rating will be cut to "junk" status.

Meanwhile, Statistics Canada reported that the economy grew by 0.2 per cent in July, after a downwardly revised 0.1 per cent increase in June. The July figure was better than the 0.1 per cent expected by analysts.

This trading session also marked the end of the quarter, which can lead to some volatile trading as investors buy and sell large amounts of stock. Traders tend to take profit at the end of the quarter, though there is also some caution headed into the final months of the year, said John Johnston, chief strategist at Davis Rea Ltd.

"It's nothing severe yet, but it certainly looks like the market is tired after a big run," he said.

"Markets have had a very solid gain since early June when they bottomed."

On Wall Street, the Dow Jones industrials backed off 48.84 points to 13,437.13. The Nasdaq composite index slipped 20.37 points to 3,116.23 and the S&P 500 index was off 6.48 points to 1,440.67.

On the TSX, the information technology sector was the sole gainer, rising 2. …

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