UPDATE 1-Toronto stocks higher after errratic swings

Tue Oct 7, 2008 10:48am EDT
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TORONTO Oct 7 (Reuters) - The Toronto Stock Exchange's main index was higher on Tuesday morning, helped by a rebound in oil prices above $90 a barrel and higher gold prices, but it was swinging erratically in nervous dealings.

The index jumped nearly 300 points shortly after market open, turned negative, then see-sawed.

The oil and gas sector initially led the charge higher, as oil CLc1 rose from the eight-month lows hit on Monday. The index's energy group, which was battered in the previous session, was up more than 10 percent at the open but swiftly cut gains and was holding a slight gain.

Canadian Natural Resources CNQ.TO rose 2.8 percent to C$60, but Suncor SU.TO was down 0.8 percent at C$31.25.

Shortly after 10:40 a.m. (1440 GMT), the S&P/TSX composite index .GSPTSE was up 53.66 points, 0.52 percent, at 10,284.09. Six of the index's 10 main groups were in negative territory.

One bright spot was the gold subindex, which was up 5 percent as gold rose to above $880 an ounce. Agnico-Eagle AEM.TO gained 7.2 percent to C$28.91, while Goldcorp G.TO rose 7.1 percent to C$28.90.

The financials group, which fell nearly 4 percent in the previous session, posted a small decline. RBC cut share-price targets on five banks [ID:nWNAS3535] as well as on Manulife Financial MFC.TO. Manulife was off 2.2 percent at C$33.94, but most banks were showing gains.

Market sentiment was initially cheerier as the U.S. Federal Reserve announced the creation of a commercial paper funding facility, another emergency move aimed at soothing volatile financial markets. [ID:nnN07447246]

($1=$1.10 Canadian) (Reporting by Ka Yan Ng; editing by Peter Galloway)