Canada's main stock index fell on Friday as concerns that the United States and its allies might take military action against Syria hit commodity prices, offsetting a jump in Alimentation Couche-Tard Inc (>> Alimentation Couche-Tard Inc) after the retailer reported results.
The Toronto market climbed 1.3 percent in August, its second straight monthly gain, outperforming the S&P 500 <.SPX> for the first time in eight months.
Couche-Tard's profit more than doubled in its first quarter, helped by stronger merchandise sales at its convenience stores in Canada, the United States and Europe.
The market digested figures that showed U.S. consumer spending barely rose in July and inflation was tame. In Canada, data indicated the economy shifted into lower gear in the second quarter and contracted in June for the first time in six months.
The United States made clear on Friday it would punish Syrian President Bashar al-Assad for a recent chemical weapons attack that it says killed more than 1,400 people.
That capped a volatile week that saw sharp moves in the prices of gold and oil as investors tried to gauge the implications of any military action in the highly-sensitive Middle East.
"The market psyche will get impacted, but the impact will be shorter term," said Shailesh Kshatriya, associate director for client investment strategies at Russell Investments Canada.
"It's hard to see the U.S. and its allies engaged in this conflict over the longer term."
The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed down 50.83 points, or 0.40 percent, at 12,653.90. Seven of the 10 main sectors on the index were in the red.
Kshatriya, who expects the TSX to end the year at 12,400, said recent gains may have been overdone.
"The equity markets in Canada have gotten a little ahead of themselves in the near term," he added. "It's difficult to see sustained momentum in the TSX when you have a situation where earnings growth is as weak as it is."
Energy shares gave back 0.8 percent, reflecting a drop in the oil price. <O/R>
Canadian Natural Resources Ltd (>> Canadian Natural Resources Limited) lost 1.9 percent to C$32.14, and Suncor Energy Inc (>> Suncor Energy Inc.) fell 1.1 percent to C$35.50.
The materials sector, which includes mining stocks, slipped 0.8 percent, with gold producers leading the decline. The price of bullion fell 1.3 percent. <GOL/>
Barrick Gold Corp (>> Barrick Gold Corp.) stumbled 2.8 percent to C$20.11, and Goldcorp Inc (>> Goldcorp Inc.) lost 1.3 percent to C$31.10.
Financials, the index's most heavily weighted sector, shed 0.2 percent. Royal Bank of Canada (>> Royal Bank of Canada) was down 0.5 percent to C$64.90, and Toronto-Dominion Bank (>> Toronto-Dominion Bank) fell 0.3 percent to C$89.62.
Consumer staples stocks showed the sharpest gain, climbing 1.1 percent. Couche-Tard shares rose 5.9 percent to C$60.74.
In company news, Bombardier Inc (>> Bombardier, Inc.) said its CSeries aircraft received a flight test permit from Transport Canada, paving the way for the maiden flight of the narrow-body jet. The stock climbed 1.3 percent to C$4.79.
(Editing by Carol Bishopric)
By John Tilak