May 13, 2008 / 8:46 PM / 9 years ago

UPDATE 2-Toronto stocks retreat as profit-taking sets in

(Updates closing numbers, adds details, quotes)

*Market retreats from Monday’s record high

*Profit-taking hurts energy shares

*Rona falls after reports drop in profit

TORONTO, May 13 (Reuters) - The Toronto Stock Exchange’s main index fell back from a record high on Tuesday, weakened by retreating oil and gas shares as investors took the opportunity to lock in profits.

The heavyweight energy sector eased 0.5 percent despite yet another record high for crude near $127 a barrel after Iran said it was studying a plan to cut oil output.

Husky Energy (HSE.TO) fell C$1.65, or 3.2 percent, to C$50.19, and Imperial Oil (IMO.TO) was down C$1.36, or 2.3 percent, at C$57.94.

“I think overall we’re just really seeing a bit of a blowoff from yesterday,” said Michael Sprung, president at Sprung & Co. Investment Counsel. “Our view would be that these highs aren’t sustainable given the weakness in the underlying economy.”

The S&P/TSX composite index .GSPTSE closed 49.37 points, or 0.34 percent, lower at 14,616.70 on Tuesday with six of its 10 main sectors falling. On Monday, the index hit a record high of 14,695.75.

Shares of Rona RON.TO slipped 50 Canadian cents, or 3.7 percent, to C$12.95 after the home renovation retailer reported a 90 percent drop in quarterly profit, and warned it would have a difficult time hitting its goal of low single-digit growth in earnings per share over the next few years.

Tech shares, which also helped fuel the benchmark’s advance on Monday, gave up 1.3 percent, amid negative sentiment south of the border over Hewlett-Packard’s (HPQ.N) deal to buy Electronic Data Systems EDS.N.

In Toronto, Research In Motion RIM.TO was off C$1.25, or 0.9 percent, to C$141.00.

On the upside, MacDonald, Dettwiler and Associates (MDA.TO) climbed C$1.21, or 3.1 percent, to C$40.45 a day after the data-processing and space-technology firm reported its first-quarter profit rose even though a robust Canadian dollar took a bite out of its revenue. ($1=$1.00 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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