Toronto stocks to open lower on weak commodities

Tue Aug 19, 2008 9:15am EDT
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*Gold and oil weak

*Fears over health of U.S. financial sector a concern

*Mega Brands may be in focus after quarterly results

TORONTO, Aug 19 (Reuters) - The Toronto Stock Exchange's main index is expected to open lower on Tuesday, tugged down by weakness in oil and gold, and as worries over the health of the U.S. economy take hold.

Oil backed off to below $113 a barrel as supply fears eased, while gold also weakened on a strengthening U.S. dollar. Weakness in both underlying commodity prices could help to push the key energy and materials stocks down.

The market could cling to economic data in the United States, said Sal Masionis, a stockbroker at Brant Securities.

A U.S. report showed that core producer prices rose faster than expected in July, heightening concerns about the health of the economy and profit outlook. Housing data there was soft, as expected.

"The majority of our trade is with the U.S. and psychologically everybody is looking at what is happening in the States," said Masionis.

Masionis added the Canadian market may also be soured by a forecast by JPMorgan Securities that U.S. investment bank Lehman Brothers LEH.N will likely take further write-downs in the third-quarter.   Continued...