UPDATE 2-Toronto stocks fall on U.S. economic worries

Mon Jan 28, 2008 10:45am EST
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TORONTO Jan 28 (Reuters) - Toronto's main stock market fell on Monday as commodity prices weakened on worries over the health of the U.S. economy in cautious trading ahead of a U.S. interest rate decision later in the week.

By mid-morning, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE fell 59.13 points, or 0.5 percent, to 12,835.70, after earlier touching a low of 12,774.75.

This followed a volatile five-day performance last week when the index vacillated more than 1,200 points before ending up about 1.2 percent.

"We're seeing a continuation of the concerns with respect to the credit markets and the hangover that that's going to have over the next couple of quarters," said Michael Sprung, president at Sprung and Co Investment Counsel.

"Going forward, the markets are going to be extremely volatile."

Eight of the TSX index's main groups fell, led by a 1.1 percent dip in energy shares and a 1.1 percent drop in the telecommunications sector. But materials shares were flat as gold issues rose on a firm price for the precious metal.

Energy shares fell as crude oil prices slid 1.6 percent to $89.28 a barrel on profit-taking spurred by worries over the health of the global economy.

Among the energy issues falling were Suncor Energy (SU.TO: Quote) which dropped C$2.13 to C$87.95 and Canadian Natural Resources (CNQ.TO: Quote) which was off C$1.90 at C$61.58.   Continued...