April 24, 2008 / 9:54 PM / 9 years ago

UPDATE 3-Resource issues take wind out of Toronto stocks

(Adds details, quotes)

By Leah Schnurr

TORONTO, April 24 (Reuters) - The Toronto Stock Exchange’s main index pared early losses but still ended more than 100 points lower on Thursday, dragged down by resource issues, which dropped with tumbling commodity prices.

Oil and gas producer Canadian Natural Resources (CNQ.TO) fell C$3.96, or 4.5 percent, to C$83.25, as crude oil prices dropped amid gains by the U.S. dollar. Oil settled down $2.24 at $116.06 a barrel, putting it further away from its recent record peak near $120.

Suncor Energy (SU.TO) slid C$1.72, or 1.5 percent, to C$114.28 after it posted an increase in profit, but cut its production target for the year as oil sands output fell behind expectations. Overall, the energy sector gave up 3.2 percent.

“It’s been a very strong run; we’ve seen the commodity prices pull off quite a bit,” said Brian Pow, vice-president, research and equity analyst at Acumen Capital Partners, in Calgary.

“I think people thought maybe we were at a top and are going to sit on the sidelines for the next little while and just watch what goes on.”

The S&P/TSX composite index .GSPTSE closed down 103.47 points, or 0.74 percent, at 13,966.33 with four of its 10 main sectors lower.

The downward trend was underscored by Potash Corp of Saskatchewan (POT.TO), even though the fertilizer company reported that its first-quarter profit nearly tripled and raised its expectations for the rest of the year due to surging fertilizer demand and prices.

Potash stock finished down C$9.60, or 4.7 percent, at C$196.90. The materials sector, home to resource shares, shed 3.5 percent.

Gold producers were battered by lower bullion prices with the subsector down 4.1 percent. Goldcorp (G.TO) was down C$2.22, or 5.7 percent, to C$36.75, and Kinross Gold (K.TO) down C$1.64, or 7.7 percent, to C$19.65.

Financial and tech companies led the upside, with the heavyweight financials group rising 2.3 percent. Canadian Imperial Bank of Commerce (CM.TO) advanced C$2.95, or 4.3 percent, to C$71.35 and Toronto-Dominion Bank (TD.TO) was up C$1.98, or 3.1 percent, at C$65.93.

In the smaller techs group, BlackBerry maker Research In Motion RIM.TO gained C$3.09, or 2.5 percent, to C$125.77. Contract electronics maker Celestica (CLS.TO) rose after it returned to a first-quarter profit and improved its forecast. Celestica jumped C$2.30, or 34.6 percent, to C$8.95, while the sector gained 3.3 percent.

Pow said that comments from the Bank of Canada that Canadian financial markets are better off than those in other countries helped give a relief rally to Bay Street’s banking sector.

“The things we took away from it are (that) it’s still a bit of an isolated problem, more U.S. related than Canadian,” said Pow.

Sal Masionis, a stockbroker at Brant Securities, said that investor optimism after U.S. bank Merrill Lynch & Co MER.N left its dividend unchanged also spilled over to the Canadian financials.

The TSX benchmark was down for the third day in a row, making for losses of 2.5 percent. The day’s decline pulled it back below the 14,000 mark.

Market volume was 357 million shares worth C$7.4 billion. Decliners outpaced advancers 974 to 610. The blue chip S&P/TSX 60 index .TSE60 closed down 6.99 points, or 0.84 percent, at 828.72.

In New York, stocks were boosted by stronger financials with the Dow Jones industrial average .DJI up 85.73 points, or 0.67 percent, at 12,848.95. The Nasdaq composite index .IXIC rose 23.71 points, or 0.99 percent, to 2,428.92.

$1=$1.01 Canadian Editing by Rob Wilson

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