3 Min Read
(Updates to midday with details)
*TSX retreats amid credit crunch worries
*Financials hurt by concerns over U.S. mortgage giants
*Resources remain higher as commodities climb
TORONTO, July 11 (Reuters) - The Toronto Stock Exchange's main index was lower at midday on Friday, erasing early gains, as it succumbed to intensifying anxiety in the United States over more fallout from the credit crunch.
Financial stocks were knocked down 1.9 percent on worries that U.S. mortgage giants Freddie Mac FRE.N and Fannie Mae FNM.N could run short of capital.
The credit concerns, as well as continuing worries over the prospects for economic growth, took the index lower, leaving only its two big resource sectors -- energy and materials, which were lifted by climbing commodities -- on the upside.
"I think there's a lot of spillover from the Fannie Mae, Freddie Mac decline that is affecting us," said Douglas Davis, president at Davis-Rea.
"Even though you've had some increase in price of oil, and, in fact, oil has gone to new highs, every other part of the market is suffering."
The S&P/TSX composite index .GSPTSE was down 41.03 points, or 0.3 percent, at 13,702.85 after hitting a session high.
Energy shares cut earlier gains, but remained up 0.8 percent, as the price of oil hit a record high above $147 a barrel amid worries over supply.
The materials group also supported the Toronto benchmark, gaining 2 percent, helped by a lift in miners as prices for gold and other metals climbed.
But the high-flying oil price hurt companies in the industrial sector as well as consumer stocks on worries over the prospects for higher business costs and lower personal spending in the face of high energy prices.
The industrials sector lost 2.3 percent, while the consumer discretionary and staples groups were down 1.7 percent and 0.4 percent, respectively. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)