UPDATE 2-Toronto stocks propelled by strong resources

Thu Jul 10, 2008 4:47pm EDT
 
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(Updates closing numbers, adds details, quotes)

*TSX index gains as resource issues advance

*Worries over credit crunch nag at broad market

*Consumer stocks fall on uneasiness over energy prices

TORONTO, July 10 (Reuters) - The Toronto Stock Exchange's main index closed 1 percent higher on Thursday, propped up by the large resource sectors, but worries over more impact from the credit crunch kept the broader market below the water line.

A $6 jump in oil prices amid threats to production in Nigeria and Brazil, and tensions between the West and Iran lifted energy producers, sent the sector up 3.2 percent.

But worries over continuing credit crunch fallout added a negative tone to the market, and knocked 0.8 percent off the bank-heavy financial sector.

"I think the market is going to have to start differentiating between (banks) that are more likely to give you a couple more negative surprises, than not," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd., in Calgary, Alberta.

"And the second thing is, it's going to have to come to the realization that we're probably most of the way through this," Kerkovius added.   Continued...