January 25, 2008 / 6:23 PM / 9 years ago

UPDATE 2-Toronto stocks give back gains in choppy action

3 Min Read

(Updates numbers, adds quotes)

TORONTO, Jan 25 (Reuters) - The Toronto Stock Exchange's main index cut gains on Friday, after jumping more than 200 points just after the open, as skittish investors locked in profits after a week of wild swings.

The S&P/TSX composite index .GSPTSE was up 2.96 points, or 0.02 percent, at 12,910.23 in the early afternoon after climbing as high as 13,157.67 earlier. Half of the TSX's 10 main groups were positive.

In a roller-coaster week, the index has swung in a range of close to 1,200 points amid continuing uncertainty over the health of the U.S. economy and what that could mean for global growth.

"I think the essence here is that we seem to have found a little traction in the last couple days ... and hopefully we can build on that and find a way to work our way higher," said Rick Hutcheon, president and chief operating officer at RKH Investments.

"It shouldn't be much of a surprise to see the market take a step back after some of the gains we've (had this week)."

Support came from rising commodity prices and hopes of another interest rate cut as data showed Canada's core inflation rate unexpectedly slowed to a two-year low in December. The inflation rate helps guide the Bank of Canada's interest rate decisions.

Potash Corp of Saskatchewan (POT.TO) also lifted the index, rising C$5.07, or 3.9 percent, to C$135.00 a day after the world's biggest fertilizer producer doubled its fourth quarter profit and gave a robust forecast for 2008.

The energy sector was up 0.1 percent as the price of crude was lifted by easing recession fears amid optimism over a U.S. economic stimulus plan. Canadian Natural Resources (CNQ.TO) moved up 13 Canadian cents, or 0.2 percent, at C$63.39.

Meanwhile, the resource-laden materials group rose 1.6 percent, helped by gains in gold prices after a power outage shut South African mines. Barrick Gold (ABX.TO) added C$1.62, or 3.2 percent, to C$52.64.

On the downside, the heavyweight financial sector dipped 0.6 percent. Toronto-Dominion Bank (TD.TO) was down after Commerce Bancorp Inc (CBH.N), which is being bought by TD, said its fourth-quarter profit fell, while credit losses quintupled. TD was off 94 Canadian cents, or 1.4 percent, at C$66.36.

$1=$1.01 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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