Canadian Markets

June 7, 2012, 5:34 p.m. EDT

Canada stocks drop; oil, gold shares hit by Fed

By Anna Andrianova, MarketWatch

NEW YORK (MarketWatch) — Canadian stocks fell Thursday for the first time in three sessions, with gold-mining stocks driving the losses after Federal Reserve Chairman Ben Bernanke surprised some investors by failing to signal the central bank was ready to unleash more stimulus.

“After Bernanke did not deliver news on further stimulus on the way, people were disappointed, gold and oil fell, causing the Canadian market to underperform and weakening the Canadian dollar,” said Brian Huen, managing partner at Red Sky Capital Management in Toronto.

The S&P/TSX Composite Index fell 41.28 points, or 0.4%, to 11,592.12, with the materials sector (TORONTO:XX:TORGC195)   leading the losses, falling 2.5%.

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Bernanke said early Thursday that the U.S. economy was at risk from the European debt crisis but said he expects growth to continue at a moderate pace. He did not introduce any new monetary easing, as some anticipated. Gold futures fell sharply after the testimony, oil gave up early gains and U.S. stocks closed near flat. Read more on Bernanke.

Gold futures for delivery in August  tumbled 2.8% to $1,588 an ounce on the Comex division of the New York Mercantile Exchange -- the largest one-day decline since April 4. See more on gold futures.

Shares of gold-mining company Barrick Gold (TSE:CA:ABX)    fell 4.2%, extending Wednesday’s selloff after the news chief executive officer Aaron Regent would step down created more uncertainty for investors.

Goldcorp Inc. (TSE:CA:G)   declined 2.9%, and Kinross Gold Corp. (TSE:CA:K)   (NYS:KGC) fell 6.1%.

Yoga-wear retailer Lululemon Athletica Inc.’s (CNQ:CA:LLL)   (NAS:LULU)   shares lost 8.8% after the company released lower-than-expected second-quarter guidance. Read more on Lululemon

The Canadian dollar (XTUP:USDCAD)  weakened, with the U.S. dollar buying C$1.0280 vs. C$1.0276 in the prior session.

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