3 Min Read
* Toronto index snaps 3-day winning streak
* Oil heads to biggest monthly fall yet
* Three gold companies report results, stocks down
TORONTO, Oct 31 (Reuters) - The Toronto Stock Exchange's main index .GSPTSE fell more than 2 percent on Friday morning as gold and oil prices swooned, pulling the materials and energy sectors lower.
The drop snapped three straight days of gains, which were built on firmer commodity prices. The decline on the TSX also tracked similar losses on global markets as Japan's interest rate cut failed to ease concerns about the world economic outlook and the impact on corporate profits.
Shortly after 11 a.m., the S&P/TSX composite index .GSPTSE was down 224.23 points, or 2.3 percent, at 9,631.98. Five of the index's 10 main groups were lower, including the top-three weighted sectors: energy, materials and financials.
"We've had a nice pop. There's still an awful lot of problems hitting us, but we're slowly getting through them," said Sal Masionis, stockbroker at Brant Securities.
The energy group led the index lower as oil eased below $65 a barrel. Crude is on track to post its biggest monthly fall yet, still pressured by Thursday's data that showed the U.S. economy contracted in the third quarter. [ID:nSP407200]
"A lot of that has to do with the U.S. dollar and other cross-currents. We're in a slowdown period and consumption will be less," Masionis said.
"As the price of these commodities dropped off a lot of projects are stopped. All you have to do is look at the oil sands projects."
Spending on multibillion dollar oil sands projects has slowed as crude prices have slumped, but Imperial Oil (IMO.TO) has not wavered from plans to build its C$8 billion Kearl development in northern Alberta. [ID:nN30298898] Imperial Oil was off 3.1 percent at C$40.72.
Gold was headed for its biggest monthly drop since 1983, thanks to market volatility and a stronger U.S. dollar, pushing Toronto's gold subindex down 2.6 percent, and contributing to the 2.9 percent fall in the materials group.
Goldcorp(G.TO) lost 5.2 percent to C$23.24 as third-quarter profit nearly quadrupled, but on a big foreign exchange gain and stronger gold prices. Without the one-time lift earnings declined. [ID:nN31336677]
Centerra Gold (CG.TO) fell 1.7 percent to C$1.18 as it said it swung to profit but cut its 2008 production outlook. [ID:nWNAB5834] Eldorado Gold (ELD.TO) turned negative, down 3.6 percent at C$5.10 as it reported higher quarterly net income. [ID:nWNAB5817]
Meanwhile, a backdrop of recession worries also kept the index under pressure. Canada's economy shrank 0.3 percent in August, partially erasing sharp gains in July, on weakness in the manufacturing, wholesale trade and energy sectors, Statistics Canada said. [ID:nN31397290] (Reporting by Ka Yan Ng; editing by Rob Wilson)