UPDATE 3-Toronto stocks retreat as resources drag

Mon Sep 8, 2008 12:44pm EDT
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*TSX retreats from big early gain

*Resources weigh on worries over demand for commodities

*Financials gain after U.S. mortgage bailout plan (Updates to midday)

TORONTO, Sept 8 (Reuters) - The Toronto Stock Exchange's main index was lower at midday on Monday, retreating from a big early gain as faltering resource and tech shares overshadowed earlier enthusiasm over the mortgage bailout plan in the United States.

The heavyweight materials and energy sectors led the way down as worries over demand for commodities in the face of slowing global growth hampered resource shares.

The energy group was also hurt by a retreat in oil prices as the U.S. dollar rose to its highest level against the euro since October. In the oil patch, Canadian Natural Resources CNQ.TO was down 3.9 percent at C$49.87.

The small technology sector also slumped, with tech bellwether Research In Motion RIM.TO falling 5.9 percent to C$106.60.

The S&P/TSX composite index .GSPTSE was down 53.83 points, or 0.42 percent, at 12,762.59 with half of its 10 main sectors in negative territory.

The benchmark index had shot up as much as 2.7 percent early in the session after the U.S. government took control of mortgage finance giants Fannie Mae FNM.N and Freddie Mac FRE.N on Sunday, the latest in a series of emergency steps to help the beleaguered U.S. economy.   Continued...