4 Min Read
*Oil falls as OPEC expected to maintain output
*CI rises after report says it plans to sell Blackmont
*Canada housing starts rise more than foreseen in August
TORONTO, Sept 9 (Reuters) - The Toronto Stock Exchange's main index tumbled on Tuesday morning as commodity-related stocks took a beating from worries over slowing economic growth.
Energy stocks sank 4.7 percent as the price of crude fell to around $104 a barrel as the threat of Hurricane Ike eased and expectations mounted that OPEC will not cut output.
The materials sector dropped 6 percent as gold and base metals prices sagged on a firmer U.S. dollar and demand fears. Fertilizer producer Potash Corp of Saskatchewan (POT.TO) fell 7.6 percent to C$150.13, while mid-tier gold miner Agnico-Eagle (AEM.TO) dropped 6.2 percent to C$48.09.
"It's more of the same," said Irwin Michael, portfolio manager at ABC Funds. "Trends start and it takes a bit for them to change course. The trend here is commodities weaker and banks stronger."
At midmorning, the S&P/TSX composite index .GSPTSE was down 291.98 points, or 2.3 percent, at 12,342.66, with six of its 10 main groups lower
Financial shares slipped 0.4 percent, after rising earlier on the lingering glow of the U.S. bailout plan for mortgage finance firms Fannie Mae FNM.N and Freddie Mac FRE.N. Toronto-Dominion Bank (TD.TO) was down 0.4 percent at C$62.14.
The consumer discretionary and consumer staples sectors were up 0.7 percent and 0.6 percent, respectively, as lower oil prices likely attracted buyers, Michael said.
"Lower oil and gas prices will provide a little bit of firepower for the consumers," he said. "They won't be spending as much and maybe, psychologically, seeing lower prices at the pump."
BlackBerry-maker Research In Motion RIM.TO rose 0.8 percent to C$109.78, recovering from a 3.8 percent slump on Monday, after a report said the global smartphone market is being hurt by the slowing economy. [ID:nN083328]
Media reports on Tuesday said that Motorola Inc MOT.N claimed in a lawsuit that RIM is illegally pilfering its workers in violation of an agreement between the two companies. Motorola says RIM has targeted at least 40 Motorola workers who can't be employed by RIM without revealing trade secrets, the reports said.
CI Financial Income Fund CIX_u.TO climbed 1.8 percent to C$22.72. A Globe and Mail report on Tuesday said the mutual fund manager is in preliminary talks to sell investment banking unit Blackmont Capital Inc to Canaccord Capital Inc CCI.TO in exchange for a minority stake in Canaccord. [ID:nN09198466]
In economic news, housing starts in Canada rose more than expected in August after cooling earlier in the summer, figures from Canada Mortgage and Housing Corp showed. [ID:nN09128555] ($1=$1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)