February 12, 2008 / 2:53 PM / 9 years ago

Toronto stocks retreat as resource issues weigh

4 Min Read

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007.Mark Blinch</p>

TORONTO (Reuters) - Early gains on the Toronto Stock Exchange evaporated on Tuesday, leaving the main index lower as a selloff of miners undercut optimism over a rescue plan for U.S. bond insurers.

The materials sector slid 2.1 percent, while Fording Canadian Coal Trust FDG_u.TO was down C$1.75, or 3.8 percent, to C$44.25, after it posted a 57 percent decline in profit. The metallurgical coal producer also remained quiet about a potential sale of its business.

Miner Teck Cominco TCKb.TO -- a major stakeholder in Fording -- fell C$1.67, or 4.8 percent, to C$32.88 the day after it said its profit had fallen 68 percent amid lower zinc and coal prices, and one-time charges.

Financials, which had prompted a strong rally earlier in the day, were up 0.2 percent after billionaire investor Warren Buffett said he had made an offer to three of the top U.S. bond insurers to reinsure $800 billion in municipal debt.

In Toronto, financial shares were mixed. Bank of Nova Scotia (BNS.TO) was up 14 Canadian cents, or 0.3 percent, at C$48.46, and Bank of Montreal (BMO.TO) was down 65 Canadian cents, or 1.2 percent, at C$54.80.

"It looks like some of the selling in gold and select commodities groups has neutralized the buying in some of the other groups, specifically the financials," said Elvis Picardo, investment strategist at Northern Securities Inc in Vancouver.

"The market is still extremely nervous, and when someone like Warren Buffett comes out and makes a comment like that, it does tend to shore up confidence, but in this case it hasn't proved to be too long lasting."

The S&P/TSX composite index .GSPTSE closed down 43.54 points, or 0.33 percent, at 13,087.38 with three of its 10 main groups to the downside. The benchmark had earlier moved up nearly 90 points and had advanced for the past three sessions.

The gold-producers subindex lost 3.8 percent while gold stumbled on lower demand out of India, a major market.

Barrick Gold (ABX.TO) fell C$1.89, or 3.8 percent, to C$48.20, and Kinross Gold (K.TO) was down C$1.18, or 5.2 percent, at C$21.75.

The heavyweight energy sector slid 0.5 percent as oil prices eased on lessening worries that Venezuela would make good on its threat to halt crude shipments to the United States.

Canadian Natural Resources (CNQ.TO) ended higher after it said costs for its Horizon oil sands project had risen as cold weather held back construction, but added that the site was still on track to open in August.

The company, Canada's No. 2 oil explorer, rose 23 Canadian cents, or 0.4 percent, to C$62.99.

On the upside, the industrials and telecoms sectors both added 1.2 percent.

Market volume was 375 million shares worth C$6.3 billion. Advancers outpaced decliners 816 to 802. The blue chip S&P/TSX 60 index .TSE60 closed down 2.83 points, or 0.37 percent, at 765.95.

South of the border, stocks rose on Buffett's bond insurer offer, which calmed investor nervousness over continuing fallout from the global credit crunch. The Dow Jones industrial average .DJI rose 133.40 points, or 1.09 percent, to 12,373.41, while the Nasdaq composite index .IXIC was flat, ending down just 0.02 of a point to 2,320.04.

($1=$1 Canadian)

Editing by Rob Wilson

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