CANADA STOCKS-Commodity price drop takes TSX lower, insurers gain

Reuters

* TSX falls 86.21 points, or 0.64 percent, to 13,294.20

* Eight of 10 main index sectors decline

* Canadian Natural, Tim Hortons higher after results

* Manulife, Sun Life jump on strong earnings

By John Tilak

TORONTO, Nov 7 (Reuters) - Canada's main stock index dropped

on Thursday after a surprise move to cut interest rates by the

European Central Bank triggered a rally in the U.S. dollar that

weighed on commodity prices, hitting shares of energy and mining

companies.

The ECB, which cut interest rates to a record low, said it

would prime banks with liquidity into 2015 to prevent the euro

zone's recovery from stalling as inflation tumbles.

Investors also processed a slew of earnings reports from top

Canadian companies, as well as mixed data that showed U.S.

economic growth accelerating in the third quarter but consumer

spending expanding at the slowest rate in two years.

"We've had very good run in the last little while ... and

we're just having a bit of a pause as people digest some of the

earnings," said Julie Brough, vice president at Morgan Meighen &

Associates. "People kind of question, 'Can it get much better?'"

Brough is bullish about Canadian stocks, which have gained

about 4 percent in the last month.

"I don't see any headwinds between now and the end of the

year," she said. "We do have momentum, and we're starting to see

funds flow back into the equity market."

The Toronto Stock Exchange's S&P/TSX composite index

closed down 86.21 points, or 0.64 percent, at

13,294.20. Eight of the 10 main sectors on the index were in the

red.

Shares of energy companies led the decline, falling more

than 1 percent, as oil prices dropped.

Suncor Energy Inc gave back 1.6 percent to C$36.09,

and Encana Corp dropped 1.8 percent to C$19.10.

But Canadian Natural Resources Ltd climbed 0.4

percent, to C$32.61, after the oil producer's third-quarter

profit more than tripled as a result of record quarterly

production and strong oil prices.

Two of Canada's top retailers posted results.

Tim Hortons Inc reported an 8 percent rise in

quarterly profit as same-store sales improved slightly in the

United States, pushing its shares up 0.3 percent to C$62.79.

Canadian Tire Corp Ltd recorded a

stronger-than-expected 11 percent rise in quarterly profit. The

stock was little changed.

After quarterly statements from the country's three biggest

insurers, shares of Manulife Financial and Sun Life

Financial Inc hit multi-year highs. Both companies

posted better-than-expected results, citing stronger mutual fund

sales and favorable market conditions.

Manulife jumped 2.7 percent to C$19.22, and Sun Life added

2.4 percent to C$36.27.

Shares of Great-West Lifeco, whose third-quarter

profit rose 1 percent, fell 0.5 percent to C$32.20.

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