CANADA STOCKS-Drop in oil, gold prices drives TSX lower

Fri Oct 31, 2008 11:41am EDT
 
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* 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.   Continued...