Toronto stocks take another big hit from resources

Wed Sep 3, 2008 5:50pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index slumped for a second day in a row on Wednesday, as concerns about falling demand for commodities dragged down resource issues.

Gains in the financial sector -- the only group to end higher -- pulled the index back from session lows as investors moved money out of commodity-related companies and into banks. Among the gainers, Bank of Montreal (BMO.TO: Quote) rose 2.7 percent to C$47.35.

The index fell more than 1 percent, adding to a 3 percent slide on Tuesday, as the materials and energy sectors fell along with oil and gold prices, amid worries over softening demand and a strengthening U.S. dollar.

In the oil patch, Canadian Natural Resources (CNQ.TO: Quote) was down 3.3 percent at C$81.98, while among gold producers, Barrick Gold (ABX.TO: Quote) fell 5.4 percent to C$33.12.

"I think, overall, people are beginning to re-evaluate global growth, and worry about the implication for the prices of these commodities that have been so high," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"What we're seeing today is a bit of a shift to more concern that, however long global growth slows, it's going to be longer than what people were thinking a bit earlier in the summer," Warne added.

The S&P/TSX composite index .GSPTSE closed down 161.82 points, or 1.22 percent, at 13,137.72 with all but one of its 10 main sectors in negative territory. It had earlier hit a low of 12,959.86.

The materials sector led declines, giving up 3.9 percent as it was hit by losses in the gold producers subindex. Fertilizer company Potash Corp of Saskatchewan (POT.TO: Quote) also dragged, falling 4.7 percent to C$164.53.   Continued...