January 4, 2008 / 9:48 PM / 10 years ago

UPDATE 2-Resources, recession fears drag on Toronto stocks

(Updates with official closing numbers, adds details, quotes)

TORONTO, Jan 4 (Reuters) - Growing worries over the prospect of a recession south of the border weighed heavily on the Toronto Stock Exchange’s main index on Friday, while resource issues retreated amid softer commodity prices.

The index tumbled immediately after the opening bell following U.S. government data that showed weak job growth in December and rising unemployment.

Toronto’s materials and energy sectors led the way down, shedding 1.3 percent and 1.2 percent respectively, hurt by weaker gold and oil prices as well as worries that slower global growth could dampen demand for resources.

Suncor Energy (SU.TO) was down C$2.17, or 1.9 percent, at C$109.67, while Centerra Gold (CG.TO) was off 93 Canadian cents, or 6.8 percent, to C$12.73.

“The U.S. jobs numbers seem to have set everybody in a bad mood first thing this morning and it stuck,” said Julie Brough, vice-president at Morgan Meighen & Associates.

“It increased the concerns that the U.S. would fall into a recession, which is causing weakness across the board.”

The S&P/TSX composite index .GSPTSE closed down 199.62 points, or 1.43 percent, at 13,778.58, the steepest decline in nearly three weeks. All of the TSX’s 10 main groups were lower.

The financials sector was also pressured by the economic jitters, falling 1.2 percent. Canadian Imperial Bank of Commerce (CM.TO) was down C$2.05, or 2.9 percent, at C$68.00, and Bank of Montreal (BMO.TO) declined 77 Canadian cents, or 1.4 percent, to C$55.27.

The consumer discretionary sector was off 1.8 percent and the industrials group lost 0.8 percent.

The index was down 0.3 percent for the week, which was shortened by the New Year holiday. But index has closed higher for four out of six sessions, helped in part by record high prices for gold and oil over the last two days.

$1=$1.00 Canadian Reporting by Leah Schnurr; Editing by Rob Wilson

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