Toronto stocks make tiny gain as resources rise

Fri Sep 5, 2008 5:33pm EDT
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By Leah Schnurr and Natasha Elkington

TORONTO (Reuters) - The Toronto Stock Exchange's main index just managed to end on the plus side on Friday, following a sharp three-day losing streak, as gains by resource and consumer issues offset worries over the outlook for the global economy.

Early on, the index had continued its week-long dive, giving up more than 2 percent after a U.S. labor market report fueled worries over the health of the economy of Canada's largest trading partner, with data showing the U.S. unemployment rate soared last month.

But the materials and consumer sectors bounced back in the late afternoon, as bargain-hunters emerged, while a drop in oil prices eased worries over consumer spending.

Fertilizer firm Potash Corp of Saskatchewan was the biggest gainer by weight, rising 7.5 percent to C$172.35, while among consumer stocks, grocer Metro Inc was up 7.5 percent at C$28.55.

"After several days of declines, particularly in the materials and energy sector, what we are seeing is people deciding that that was a bit overdone and reassessing how much the stocks had sold off," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"I think, however, the trend's likely to continue to be lower just because there continue to be worries about how much global growth is falling. But obviously, for the second half of today, people have decided that this week's selloff was a bit overdone."

The S&P/TSX composite index closed up 2.28 points, or 0.02 percent, at 12,816.42 with four of its 10 main sectors on the upside. The benchmark has shed nearly 7 percent over the holiday-shortened four-day week in a broad retreat prompted by worries over slowing global growth and the impact that will have on the demand for commodities.

The TSX has fallen to its lowest levels in more than five months in its worst weekly showing since January. The benchmark is down more than 15 percent from the life high, putting it closer to official bear market territory, generally defined as a 20 percent decline from the peak.   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto in this November 9, 2007 file photo. REUTERS/Mark Blinch</p>