UPDATE 4-Toronto stocks dragged down as oils, techs fall

Wed Feb 6, 2008 4:36pm EST
 
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(Updates numbers, adds detail, quotes)

TORONTO Feb 6 (Reuters) - Early gains on the Toronto Stock Exchange fizzled out on Wednesday, leaving the main index lower as weak energy and tech issues undercut the morning's optimism over strong company earnings.

After rising more than 100 points shortly after the open, the index tumbled as worries over the prospect of a U.S. recession again took hold.

Sliding oil prices set the tone for the heavyweight energy sector, which fell 1.4 percent, as crude stumbled amid an unexpectedly big rise in U.S. petroleum stockpiles. In Toronto, Petro-Canada PCA.TO lost C$1.45, or 3.3 percent, to C$43.12.

The tech sector was down 3.4 percent, with BlackBerry-maker Research In Motion RIM.TO falling C$4.32, or 4.9 percent, to C$84.60.

"Certainly this fear of a recession in the United States is still front and center in investors' minds," said Elvis Picardo, investment strategist at Northern Securities Inc.

"Some of the earnings were fairly strong but I think investors at this point are still quite concerned about what lies ahead," said Picardo. "Perhaps the feeling is that the earnings outlook for many companies is not going to be as robust as was the expectation even three months ago."

The S&P/TSX composite index .GSPTSE closed down 64.75 points, or 0.5 percent, at 12,867.20 with half of its 10 main groups in negative territory.

The financial sector also added to losses, falling 0.4 percent, with Canadian Imperial Bank of Commerce CM.TO down C$1.67, or 2.4 percent, at C$68.33, and Bank of Montreal BMO.TO off 55 Canadian cents, or 1 percent, to C$56.15.   Continued...