CANADA STOCKS-TSX off session high as oil prices retreat

Tue Jan 6, 2009 11:26am EST
 
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* Toronto index hits highest level since Nov. 12

* Early rally in oil prices credited with market rise

* TSX higher for sixth straight session (Adds details, comments)

By Frank Pingue

TORONTO, Jan 6 (Reuters) - Toronto's main stock index backed away from the two-month highs it was nearing earlier on Tuesday as oil prices turned lower and took some of the steam out of the influential energy sector.

The energy sector rose nearly 4 percent early in the session as Israel's military incursion into Gaza helped to heighten concerns about supply disruptions and lifted the price of crude to over $50 a barrel.

Then oil retreated to just above $48 a barrel and sapped some of the group's momentum, leaving it with a gain of 1.4 percent by late morning.

"We came out of the gate pretty strong as the oil price was up over a buck, and that certainly pushed energy stocks a little higher," said Bruce Latimer, a trader at Dundee Securities. "But the price of oil came back ... and some selling came in on the commodity itself."

At 11:10 a.m. (1610 GMT), the S&P/TSX composite index .GSPTSE was up 39.45 points, or 0.42 percent, at 9,324.06, with six of its 10 main sectors in positive territory.   Continued...