By Derek Abma
Vancouver Sun
Friday, November 02, 2007

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After taking a big step forward a day earlier, fueled by a string of positive news, the Toronto Stock Exchange's benchmark index took a big step backward on Thursday after some not-so-positive news.

Adrian Mastracci, fee-only portfolio manager at KCM Wealth Management in Vancouver, says, "This market is really driven by news, by data releases."

The S&P/TSX Composite Index -- which gained more than 300 points on Wednesday -- lost 252.46 points on Thursday, or 1.7 per cent, to close at 14,372.54.

The Venture Composite Index was down moderately by 3.94 points, or 0.1 per cent, to 3.131.68.

U.S. stock indexes were down more severely. The Dow Jones Industrial Average fell 362.14 points, or 2.6 per cent, to 13,567.87.

The Nasdaq Composite Index was down 64.29 points, or 2.2 per cent, to 2,794.83. The S&P 500 Index fell 40.94 points, or 2.6 per cent, to 1,508.44.

A day after the U.S. Federal Reserve lowered its benchmark interest rate a quarter-point, most of the news coming out Thursday caused investors to sell. This included a report by CIBC World Markets saying Citigroup Inc., the largest U.S. bank, may have to cancel its dividend as it seeks to raise $30 billion US in capital.

"The risks are rising that we're going to get more bad news down the road, and I think investors are pulling back a little bit," said Adrian Mastracci, portfolio manager with KCM Wealth Management Inc. in Vancouver.

He added: "This market is really driven by news, by data releases."

Mastracci said, for instance, some healthy job numbers from Canada and the U.S. today could lead to a bull stock market to end the week.

The worst-hit industry sector on the TSX Thursday was materials, the index for which was down three per cent. Gold giant Barrick Gold Corp. stock was down $1.61, or 3.8 per cent, to $40.39. A day earlier, it reported third-quarter earnings that were shy of analysts' expectations.

As well, gold prices in New York fell $1.60 to $793.70 US an ounce, after hitting a 27-year high of $802.50 US at one point in the day.

The usually steady TSX financials index, which has a heavy influence on the benchmark value, was down two per cent.

Scotia Capital analyst Kevin Choquette predicted Canadian banks, which report their fourth-quarter results this month, will average earnings growth of three per cent, the smallest gain in five years. Royal Bank of Canada shares fell $1.33, or 2.4 per cent, to $54.71. Canadian Imperial Bank of Commerce was down $3.84, or 3.8 per cent, to $98.16.

Bank of Montreal slipped $1.21 to $61.79. Canada's fourth-largest bank may post the biggest profit decline because of potential writedowns. BMO is scheduled to report earnings on Nov. 27.

Manulife Financial Corp., Canada's largest insurer, slid $1.16, or 2.6 per cent, to $43.03, the most in eight months.

The energy sector's TSX gauge was down 1.1 per cent. Crude oil was down $1.04 to $93.49 US a barrel in New York after hitting a record $96.24.

Shares in Canadian Natural Resources Ltd., after reporting reduced third-quarter earnings, were down $2.78, or 3.5 per cent, to $75.78.

Talisman Energy Inc. lost 53 cents, or 2.6 per cent, to $20.05.

Vancouver-based Teck Cominco Ltd., the biggest miner of industrial metals in Canada, fell $1.66, or 3.5 per cent, to $45.65.

Suncor Energy Inc., the second-biggest oilsands miner, dropped $2.44 to $101.01.

Cameco Corp. fell the most in a year, losing $3.65, or 7.8 per cent, to $42.90. The biggest uranium miner said Russia's OAO Techsnabexport, which supplies it with about seven million pounds of recovered uranium a year, is demanding their contract be revised for higher prices. Several analysts cut their ratings.

The Canadian dollar was down 73 basis points to close at $1.0512 US on Thursday.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.