UPDATE 1-Toronto stocks pare losses, energy stocks take hit

Thu Jan 31, 2008 10:14am EST
 
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TORONTO Jan 31 (Reuters) - The Toronto Stock Exchange's main index recovered more than half of its losses on Thursday morning, hit by lower commodities, a big jump in U.S. jobless claims, and concern over more woes at global financial institutions.

Energy firms, which dominated the upside in the previous session, led the fall on Thursday with Petro-Canada PCA.TO off 1.2 percent after the oil producer and refiner said cash flow dropped sharply in the fourth quarter.

Taking a cue from U.S. and European markets, Toronto's S&P/TSX composite index .GSPTSE tumbled 75.84 points, or 0.6 percent, to 12,922.37. It was down more than 170 points shortly after trading began.

Six of the index's 10 main sectors were in the red, with the energy sector down 0.7 percent and materials off 0.5 percent.

Petro-Canada fell C$1.13 to C$92.37, while Barrick Gold (ABX.TO: Quote), the world's biggest gold producer, dipped 51 Canadian cents to C$52.40.

U.S. crude oil slipped more than $2 to below $90 a barrel. Spot gold fell by about $3 to near $924 an ounce.

Financial stocks were also beaten down, by 0.8 percent, after Standard & Poor's said credit losses for global financial institutions could grow to more than $265 billion. For details, see: [nL31516052]

Manulife Financial (MFC.TO: Quote) dropped 37 Canadian cents to C$36.88.

The TSX, which has tracked near the 13,000-point level the last five days, is also under pressure from fears of a U.S. recession. Those fears were stoked on Thursday after data showed U.S. jobless claims rose more than expected last week.

($1=$1.01 Canadian) (Reporting by Jonathan Spicer; Editing by Scott Anderson)