UPDATE 2-Toronto stocks edge into positive territory

Thu Mar 13, 2008 1:18pm EDT
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(Updates stock movement, adds details, quotes)

TORONTO, March 13 (Reuters) - The Toronto Stock Exchange's main index recovered earlier losses on Thursday afternoon, propelled higher by robust gold stocks and hope that the end of subprime mortgage writedowns could be near.

But wariness about tight credit markets and concern over how much more of the impact is yet to come kept the gains moderate.

The relief came after Standard & Poor's said the end of subprime mortgage writedowns from large financial institutions is in sight, but such writedowns could hit $285 billion.

The Toronto index had fallen more than 100 points in the morning amid concern over a stumbling U.S. economy and the impact it could have on Canada and the rest of the world.

"The markets came off their lows ... so they're bouncing on that comment. But whether or not the bulk of the writedowns are done yet, I think everybody by tomorrow will change their mind again," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd., in Calgary.

A surge in gold stocks also pulled the index higher after the price of gold broke above $1,000 an ounce. The gold producers subindex was up 2.5 percent. Barrick Gold (ABX.TO: Quote) jumped C$1.44, or 2.9 percent, to C$51.59 and Goldcorp (G.TO: Quote) was up C$1.34, or 3.2 percent, at C$43.93.

The S&P/TSX composite index .GSPTSE was up 6.59 points, or 0.05 percent, at 13,303.94 with just two of its 10 main sectors in positive territory.

The advance in gold producers helped lift the materials sector by 1.5 percent. The heavyweight energy group rose 0.8 percent while oil once again touched a new record high. Canadian Oil Sands Trust COSu.TO was up 97 Canadian cents, or 2.3 percent, at C$42.95 and Imperial Oil (IMO.TO: Quote) added 19 Canadian cents, or 0.3 percent, to C$55.31.   Continued...