June 11, 2008 / 9:20 PM / 9 years ago

UPDATE 3-Toronto stocks clipped by economic fears

(Adds details, quotes)

* TSX ends little changed as economic fears drag

* Resources rise, but financials drop 1.8 percent

* Energy sector climbs along with oil prices

By Leah Schnurr

TORONTO, June 11 (Reuters) - The Toronto Stock Exchange's main index closed lower for the fourth day in a row on Wednesday, as support from agriculture and other resource companies was offset by worries over inflation.

Shares of Agrium (AGU.TO) touched a record high after the company raised its profit outlook amid strong sales of fertilizer, seed and chemicals. Agrium closed up C$7.77, or 8.3 percent, at C$102.00.

But worries over the impact of inflation on the global and domestic economy weakened the market, while oil prices rose more than $5 after data showed U.S. stockpiles fell sharply.

"I think the inflation worries are front and center now, and they're stoked by comments and actions of the central bankers," said Rick Hutcheon, president and chief operating officer of RKH Investments.

"(Bank of Canada Governor Mark) Carney, by not cutting rates the other day, implicitly implied that Canadians are getting a bit worried about inflation on the horizon as well."

The S&P/TSX composite index .GSPTSE closed down 19.68 points, or 0.13 percent, at 14,716.52. In the last four sessions the benchmark has sagged 1.8 percent, thanks largely to a 224-point drop on Tuesday.

On the agriculture front, Potash Corp of Saskatchewan (POT.TO) added C$2.45, or 1.1 percent, to C$227.33 as the company's CEO told a conference in Toronto that fertilizer prices were not yet near their peak. The larger materials sector rose 0.8 percent.

Viterra VT.TO pushed up 54 Canadian cents, or 4 percent, to C$14.05 after it reported stronger than expected earnings as it handled more grain and boosted its margins.

Energy shares gained 1.7 percent, lifted by the rising oil price. Canadian Natural Resources (CNQ.TO) was up C$2.56, or 2.5 percent, at C$105.26, and Suncor Energy (SU.TO) added C$1.43, or 2.1 percent, to C$68.76.

Other than the small tech group, every other sector was lower, hit by worries over the impact on consumer spending from sky-high oil prices, as well as by fears of more trouble in the U.S. financial sector.

On Bay Street, the financials gave up 1.8 percent, with National Bank of Canada (NA.TO) down C$1.75, or 3.3 percent, at C$51.83, and Canadian Imperial Bank of Commerce (CM.TO) off C$1.45, or 2.2 percent, at C$63.30.

Tech issues gained 1.8 percent, helped by a jump in Nortel Networks NT.TO after the company reaffirmed its 2008 outlook and said it is preparing to boost sales in emerging markets. Nortel finished up C$1.15, or 13.9 percent, at C$9.42

In individual moves, Forzani Group FGL.TO tumbled 10.3 percent, or C$1.70, to C$14.80 after the sporting goods retailer posted a quarter loss amid lower inventory.

Russel Metals (RUS.TO) climbed C$1.80, or 6.5 percent, to C$29.60 after it said its second quarter results will come in above the Street's expectations.

Market volume was 409 million shares worth C$8.3 billion. Decliners outpaced advancers 885 to 697. The blue chip S&P/TSX 60 index .TSE60 closed down 0.33 point, or 0.04 percent, at 879.07.

In New York, stocks were also battered by inflation worries, as well as a report that said U.S. investment bank Lehman Brothers LEH.N may need to raise more capital.

The Dow Jones industrial average .DJI slumped 205.99 points, or 1.68 percent, to 12,083.77, and the Nasdaq composite index .IXIC fell 54.93 points, or 2.24 percent, to 2,394.01. ($1=$1.02 Canadian) (Editing by Rob Wilson)

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