UPDATE 2-Toronto stocks pare losses, still in the red

Wed Apr 23, 2008 11:51am EDT
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(Adds details, analyst's view, updates stock movement)

By Jonathan Spicer

TORONTO, April 23 (Reuters) - The Toronto Stock Exchange's main index pared some early losses but remained down 0.4 percent on Wednesday as falling commodity prices took a toll on gold and energy stocks.

A rebounding U.S. dollar knocked the wind out of spot gold and crude oil prices, pushing down the resource-heavy Toronto benchmark.

Adding to the downside momentum, data showed retail sales unexpectedly fell in February, a sign that the Canadian consumer may be retreating amid an overall economic slowdown. For details, see: [nN23473096]

Tim Burt, president and chief investment officer at Cardinal Capital Management in Winnipeg, Manitoba, said that eventually the slowdown will undermine rising commodities.

"A lot of the commodity prices that we're seeing now are unsustainably high and driven up by speculators ... so maybe we're seeing the start of a short-term correction," he said.

The S&P/TSX composite index .GSPTSE was down 62.78 points at 14,162.58 after falling more than 100 points in earlier action.

The materials group fell 1.2 percent, with its gold subsector off 1.5 percent. Barrick Gold (ABX.TO: Quote), the world's leading gold producer, fell 65 Canadian cents to C$42.55.   Continued...