Falling commodity prices take Toronto stocks lower

Mon Aug 11, 2008 5:24pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index slid more than 100 points on Monday, pulled down by resource shares, which fell in tandem with commodity prices.

Drug maker Cardiome Pharma was among the biggest drags on the index, losing 17.7 percent after the company said U.S. regulators had requested more information on its Kynapid treatment for a potentially fatal heart condition.

Shares of gold producers tumbled as they were rattled by a sharp drop in bullion prices as the U.S. dollar gained. Gold slumped to below $820 an ounce and shares of Barrick Gold, the world's biggest producer, were down 6.4 percent.

"(Resource issues) definitely look like they're oversold, but I would say the market sentiment is still very negative, so I think they still have room to go down," Laura Lau, senior portfolio manager at Sentry Select Capital Corp.

The S&P/TSX composite index closed down 138.55 points, or 1.04 percent, at 13,203.19 with seven of its 10 main sectors in negative territory.

The small health sector led the way down, shedding 6.3 percent as Cardiome dropped C$2.28 to C$10.57. Cardiome and its Japanese co-development partner, Astellas Pharma Inc, said the U.S. Food and Drug Administration had completed its review of their application for approval of the Kynapid treatment but requires more information before making a decision.

The materials group, home to mining companies, fell 4.7 percent as prices for gold and other metals weakened. Barrick was down C$2.40 at C$35.00, while Teck Cominco lost C$1.92, or 4.7 percent, to C$39.32.

Fertilizer shares also lagged, with Agrium falling C$3.96, or 4.7 percent, to C$79.94, and Potash Corp of Saskatchewan giving up C$11.44, or 6.3 percent, to C$171.55.   Continued...