CANADA STOCKS-TSX dives as oil, gold prices drop

Mon May 11, 2009 10:32am EDT
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* TSX falls below 10,000, but then pares losses

* Falling commodities lead the way lower (Updates with activity after market open, comments)

TORONTO May 11 (Reuters) - Toronto's main stock market fell on Monday morning as oil and other commodity prices weakened and as investors took profits following strong gains last week.

Resource prices weighed on the commodity-heavy index as U.S. crude oil backed off a six-month high and was trading below $58 a barrel and gold prices softened.

Toronto's energy group slumped 3.45 percent, led by a 3.5 percent drop to C$63.13 for oil company EnCana (ECA.TO: Quote). That was followed by Suncor Energy (SU.TO: Quote), off 4.5 percent at C$35.58.

The materials group fell 1.4 percent as gold-mining stocks were among the weakest components.

"Resources are a key part of it. There's nothing significant other than they had runup last week. It's just the inevitable give-up time," said John Ing, president of Maison Placements Canada.

At 10:10 a.m. (1410 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 176.17 points, or 1.72 percent, at 10,061.82. Earlier, the index fell more than 2 percent to as low as 9,995.82.

Nine of the index's 10 main groups were lower.   Continued...