UPDATE 2-Toronto stocks fall for 3rd day on economic fears
(Updates figures, adds details, comments)
By Leah Schnurr
TORONTO Jan 17 (Reuters) - The Toronto Stock Exchange's main index gave up early gains to drop on Thursday afternoon, for a third straight day of heavy losses, amid intensifying worries over the prospect of a recession in the United States.
Shortly after the open, the index had rallied 100 points, only to retrace its steps further into five-month lows after oil and gold prices retreated and comments by Federal Reserve Chairman Ben Bernanke failed to reassure investors.
Resource issues led the retreat, with the materials sector down 2.9 percent and the heavyweight energy group shedding 1.8 percent. Net decline leader Potash Corp of Saskatchewan (POT.TO: Quote) slumped C$14.66, or 10.6 percent, to C$123.04, and Canadian Natural Resources (CNQ.TO: Quote) stumbled C$2.21, or 3.2 percent, to C$66.17.
Bernanke told the U.S. House of Representatives Budget Committee earlier on Thursday that he supported efforts to craft an economic stimulus package and repeated that the Fed would act aggressively to counter recession risks.
"The Fed's behind the eight-ball here and that's a big concern for the market in the fact that he waffles around on trying to make a clear point of view on easing," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd., in Calgary.
"We need a lot more decisive action from the Fed before this market takes a more positive view."
The benchmark S&P/TSX composite index .GSPTSE was down 172.98 points, or 1.32 percent, at 12,901.88, with all but one of its 10 main groups lower. Continued...