UPDATE 1-Toronto stocks edge higher ahead of Fed move

Tue Jan 29, 2008 10:42am EST
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TORONTO Jan 29 (Reuters) - Toronto stocks edged cautiously higher on Tuesday morning amid wariness ahead of the U.S. Federal Reserve's decision on interest rates on Wednesday and as a record high gold price spurred profit-taking in gold-mining shares.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 26.79 points, or 0.2 percent, at 13,013.69 after briefly dipping into negative territory.

Eight of the index's 10 groups were higher, led by a 1.9 percent boost from the industrials group and a 0.7 percent climb among utilities.

But many investors seemed content to sit on the sidelines ahead of a U.S. rate announcement.

"Until the (Federal Reserve) makes its pronouncement, I think we'll wallow about," said Rick Hutcheon, president and chief investment officer at RKH Investments.

The Fed surprised investors last week with an emergency rate cut of 75 basis points and more rate cuts are expected this week, with wide debate over whether it will be 25 or 50 basis points.

Industrial shares were led higher by railway companies after Canadian Pacific (CP.TO: Quote) said on Tuesday that lower income tax rates helped double its fourth-quarter earnings.

CPR, the country's second-biggest railway, was up C$3.90, or 6 percent, at C$68.80, while rival Canadian National Railway (CNR.TO: Quote) added 74 Canadian cents to C$49.92.   Continued...