TSX hits 2-month low on Iamgold, fiscal worries

TORONTO (Reuters) - Canada's main stock index fell more than 1 percent to a two-month low on Wednesday, hit by a big drop in miner Iamgold Corp after it reported weak results and by ongoing concerns about the U.S. "fiscal cliff" and European debt.

Iamgold played the biggest role of any stock in the market's drop after it reported lower-than-expected quarterly earnings on Tuesday and cut its production target for 2013.

The index's materials subgroup, which includes mining stocks, fell 1.81 percent, with Iamgold down 16.13 percent at C$12.48 and fertilizer producer Potash Corp falling 2.50 percent to C$37.83.

Market focus was also squarely on the U.S. fiscal crisis as well as the debt crisis in Europe, where there was a wave of strikes to protest spending cuts and tax hikes contained in austerity programs.

The Toronto index's materials and energy subgroups led the market lower because they are the most economically sensitive, said Gavin Graham, president of Graham Investment Strategy.

"When people have concerns about the pace of economic growth, particularly in the United States but also in China, then they tend to sell off," he said.

The Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was down 111.98 points, or 0.92 percent, at 12,022.68. Nine of its 10 main subgroups were lower. Earlier in the session, and the index hit 11,992.38, its lowest point since September 5.

Miner Goldcorp Inc dropped 2.14 percent to C$42.01, and Barrick Gold Corp was down 1.73 percent at C$34.73.

The energy sector was down 0.62 percent. Suncor Energy fell 1.04 percent to C$32.21.

Bank of Nova Scotia was down 1.17 percent at C$53.23, and Toronto-Dominion Bank fell 1.08 percent to C$79.49. The financial subgroup, which has the biggest weighting on the index, lost 0.79 percent.

Some consumer stocks made gains. Rona Inc was up 7.29 percent at C$11.78 after a large shareholder called for the replacement of the home improvement retailer's board, leading to a revival of takeover talk.

Loblaw Cos Ltd was up 3.12 percent at C$34.39 after the grocer raised its dividend.

(Reporting By John Tilak; Editing by Peter Galloway)

Source: http://news.yahoo.com/tsx-may-open-higher-tracking-wall-street-gains-135032561--finance.html

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