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TSX Down Amid Mixed Cues - Canadian Commentary

Toronto stocks were lingering in the red Monday morning amid renewed concerns over the debt situation in the euro zone after a recent batch of weak economic numbers from the region. Also, a contraction in the Canadian economy in February weighed on trader sentiment.

Meanwhile, weak data from the world's largest economy fueled expectations for more monetary stimulus from the Federal Reserve.

The S&P/TSX Composite Index lost 65.65 points or 0.54 percent to 12,172.10, after adding just over 250 points or 2 percent in the past three sessions.

The Diversified Materials Index lost over 1 percent, with First Quantum Minerals (FM.TO) losing close to 3 percent. Inmet Mining (IMN.TO) dipped 2 percent.

Financial stocks were also under pressure, with National Bank (NA.TO), TD Bank (TD.TO), Royal Bank (RY.TO) and Scotiabank (BNS.TO) losing around 1 percent each.

The price of crude oil was moving lower Monday morning after today's economic data from the Europe raised concerns over the economic growth in the region. The Spanish economy slipped back into recession in the first quarter of 2012. Crude for June slipped $0.55 to $104.38 a barrel.

In the oil patch, MEG Energy (MEG.TO), Bonterra Energy (BNE.TO) and Tourmaline Oil (TOU.TO) were down around 2 percent each.

The price of gold was moving lower, erasing recent gains Monday morning as the US dollar steadied versus a basket of currencies. Gold for June dropped $8.40 to $1,656.40 an ounce.

Among gold plays, Goldcorp. (G.TO) lost 1.50 percent after announcing that the environmental permit approval for its El Morro copper-gold project was suspended by the Supreme Court of Chile.

Dundee Precious Metals (DPM.TO) dived over 13 percent after announcing that it had received first contact from the Namibian government on Tsumeb Smelter Audit.

On the positive side, educational and professional materials publisher McGraw-Hill Ryerson (MHR.TO) gained nearly 5 percent even after reporting a wider first quarter net loss of C$2.7 million or C$1.37 per share compared to the net loss of C$2.2 million or C$1.10 per share last year.

Smart phone maker Research In Motion (RIM.TO) gathered close to 3 percent.

In economic news, Statistics Canada said real gross domestic product declined 0.2 percent in February, after creeping up 0.1 percent in January Economists were expecting February to match January's anemic growth. On the bright side, gains in wholesale trade and in the finance sector outweighed declines in retail trade and in the transportation and warehousing sector.

From south of the border, the Commerce Department said U.S. personal incomes grew slightly more than expected in March but growth in consumer spending slowed somewhat. Department figures put U.S. personal incomes up 0.4 percent in March, slightly higher than the 0.3 percent growth posted for February. That comes in slightly higher than the 0.3 percent growth predicted by most economists. Furthermore, the February personal income figures were revised up from the 0.2 percent growth rate initially reported.

Elsewhere, euro zone annual inflation eased less than expected to 2.6 percent in April from 2.7 percent in March, flash estimate issued by Eurostat showed. Economists were forecasting the rate to fall to 2.5 percent in April.

The Spanish economy slipped back into recession in the first quarter of 2012. Gross domestic product contracted 0.3 percent quarter-on-quarter in the first quarter, the statistical office INE said.

Data from the Federal Statistical Office earlier today revealed that retail sales in Germany increased for the first time in three months in March. The seasonally adjusted sales rose 0.8 percent month-on-month in real terms in March, following a 0.9 percent drop in February and 1 percent fall in January. Economists expected a sharper 1.1 percent rise in sales.

by RTTNews Staff Writer

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