December 19, 2007 / 7:05 PM / 10 years ago

UPDATE 2-Toronto stocks pare gains, CIBC weighs

3 Min Read

(Updates to afternoon)

TORONTO, Dec 19 (Reuters) - The Toronto Stock Exchange's main index pared much of its earlier gains by Wednesday afternoon, as the fallout from a warning by Canadian Imperial Bank of Commerce (CM.TO) partly offset strength in energy shares.

The index advanced more than 130 points early in the day, boosted by hot crude oil prices, but retreated after CIBC said there's a good chance it will incur a "large charge" due to its exposure to bond insurer ACA Capital Holdings. For details, see: [nN19631558]

That sent financial shares into negative territory, and knocked CIBC down C$1.13, or 1.6 percent, to C$71.16.

But the TSX energy sector, which is second in size to financials, remained buoyant on the back of bullish U.S. crude oil prices, which climbed above $92 a barrel after a report showed U.S. crude inventories fell last week.

The S&P/TSX composite index .GSPTSE was up 29.26 points, or 0.2 percent, at 13,387.33 by mid afternoon.

The utilities and consumer staples groups were each up 0.6 percent. On the downside, the financial sector dropped 0.1 percent while materials fell 0.5 percent.

EnCana Corp (ECA.TO) jumped 92 Canadian cents to C$67.89, while Talisman Energy TLM.TO,which said it had begun producing oil and gas from the Wood field, added 25 Canadian cents to C$17.90. For details, see: [nN19494436]

Elsewhere in the sector, Precision Drilling Trust PD_u.TO rose 5 Canadian cents to C$15.55 after the company said it aimed to quicken its pace of growth next year by focusing capital spending on the construction of "super" series land drilling rigs. For details, see: [nN19574121]

On the downside, Barrick Gold (ABX.TO) tripped on soft spot gold prices. The company's stock was off 66 Canadian cents at C$37.55.

The TSX benchmark inched higher earlier in December until the U.S. Federal Reserve cut interest rates by a modest 25 basis points. That disappointed investors hoping for a deeper cut and sent the Canadian index down in five of the last six sessions.

It fell 3.3 percent in the previous four sessions.

$1=$1 Canadian Reporting by Jonathan Spicer; Editing by Scott Anderson

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