UPDATE 2-Toronto stocks eke out gain as resources rebound

Fri Sep 5, 2008 4:50pm EDT
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* TSX up slightly after three days of steep losses

* Resource and consumer shares rise late in day

* Index ends shortened week down nearly 7 percent (Updates closing numbers, adds details, quotes)

TORONTO, Sept 5 (Reuters) - The Toronto Stock Exchange's main index just managed to end on the plus side on Friday, following a sharp three-day losing streak, as gains by resource and consumer issues offset worries over the outlook for the global economy.

Early on, the index had continued its week-long dive, giving up more than 2 percent after a U.S. labor market report fueled worries over the health of the economy of Canada's largest trading partner, with data showing the U.S. unemployment rate soared last month.

But the materials and consumer sectors bounced back in the late afternoon, as bargain-hunters emerged, while a drop in oil prices eased worries over consumer spending.

Fertilizer firm Potash Corp of Saskatchewan POT.TO was the biggest gainer by weight, rising 7.5 percent to C$172.35, while among consumer stocks, grocer Metro Inc MRUa.TO was up 7.5 percent at C$28.55.

"After several days of declines, particularly in the materials and energy sector, what we are seeing is people deciding that that was a bit overdone and reassessing how much the stocks had sold off," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"I think, however, the trend's likely to continue to be lower just because there continue to be worries about how much global growth is falling. But obviously, for the second half of today, people have decided that this week's selloff was a bit overdone."   Continued...