4 Min Read
(Updates with analyst comments, details)
By Jonathan Spicer
TORONTO, Jan 10 (Reuters) - The Toronto Stock Exchange's main index was down more than 115 points on Thursday morning as more clouds gathered over the U.S. economic landscape.
Investors cashed in equities as doubts grew about U.S. demand for commodities, which are key indicators for the resource-heavy Toronto index.
Energy and materials stocks followed the prices of oil and base metals lower, while financial issues were undercut by yet another profit warning by a U.S. financial institution.
"The mindset that managers had six months ago is substantially different than the mindset they have now. There are just too many unknowns ... so cash is a nice thing to have," said Rick Hutcheon, president and chief operating officer at RKH Investments.
The S&P/TSX composite index .GSPTSE was down 116.62 points, or 0.9 percent, at 13,463.32 with all but one of its 10 main groups in the red. The TSX fell as much as 142 points shortly after trading began.
The financial sector, which has dropped in five of the six sessions this year, slid 0.5 percent after Capital One Financial Corp (COF.N), a U.S. credit card issuer and banking firm, issued a profit warning that fueled more worry about the ongoing credit crisis.
"We're a little bit insulated from some of these overarching company-specific issues in the United States, but it's coloring everybody's perceptions of stability and growth prospects," said Hutcheon.
But the morning's biggest drop was in the energy sector, which fell 2.1 percent.
Potash Corp of Saskatchewan (POT.TO) was off C$1.66 at C$137.41 as the materials group gave up 0.4 percent.
Investors may have been locking in profits after jumps by both the energy and materials groups in the previous session.
Worry over an economic slowdown dragged on commodity prices, with U.S. crude down $2.01 at $93.66 a barrel, and copper and most other base metals lower.
Spot gold, however, rebounded sharply from earlier in the morning, rising above $882 an ounce. That pulled the TSX gold subsector up 0.2 percent.
The telecoms group -- which has not yet logged a winning day this year -- was up 0.1 percent.
Meanwhile, shares of Cogeco Inc (CGO.TO), which posted its results late on Wednesday, plunged 8.8 percent after it reported a quarterly loss.
Cogeco Inc fell C$3.47 to C$35.95 after the TV and communications firm said an impairment charge led to a loss in its first quarter. For details, see: [nN09628453]
Elsewhere, drugstore chain Jean Coutu Group (PJCa.TO) reported a big drop in second-quarter profit, which was expected, due to the sale of its Brooks Eckerd chain in the United States last year. For details, see: [nN10312877]
Jean Coutu stock rose 43 Canadian cents to C$10.59.
$1=$1.01 Canadian Reporting by Jonathan Spicer; editing by Rob Wilson