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TORONTO (Reuters) - Early gains on the Toronto Stock Exchange fizzled out on Friday, leaving the composite index little changed at the end of the day as investors opted to lock in profits after a week of wild swings.
A retreat by banking shares helped offset advances in the materials sector and robust gains for Potash Corp of Saskatchewan.
Potash, the world's biggest fertilizer producer, climbed C$4.05, or 3.1 percent, to C$133.98 a day after it doubled its fourth-quarter profit and offered a positive forecast for the year. The materials sector, home to resource shares, rose 1.4 percent.
The financial sector, the largest on the index, was off 0.7 percent. Toronto-Dominion Bank fell C$1.02, or 1.5 percent, to C$66.28 after its U.S.-based takeover target, Commerce Bancorp Inc, said its fourth-quarter profit fell, while its credit losses quintupled. Commerce is being bought by TD for $8.5 billion in cash and stock.
Analysts said that, given the turbulence the market has seen, it wasn't surprising that investors were wary of making big bets at the end of the week.
"I think the essence here is that we seem to have found a little traction in the last couple days ... and hopefully we can build on that and find a way to work our way higher," said Rick Hutcheon, president and chief operating officer at RKH Investments.
"It shouldn't be much of a surprise to see the market take a step back after some of the gains we've (had this week)."
The S&P/TSX composite index closed down 12.44 points, or 0.1 percent, at 12,894.83 after racing up by more than 200 points in the morning. Six of the TSX's 10 main groups were lower.
The tech sector gave up 1.6 percent, with BlackBerry maker Research In Motion down C$3.40, or 3.6 percent, at C$91.91. The consumer staples sector shed 0.8 percent, as cheese producer Saputo Inc fell C$1.20, or 4.3 percent, to C$46.31.
The index has traversed a range of about 1,200 points this week, amid continuing uncertainty over the health of the U.S. economy and the impact a slowdown south of the border could have on global growth.
"In that environment, with that much certainty, with that many variables, nobody is doing anything with a great deal of conviction," said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario..
"So, you're seeing a lot of short-term moves as people perceive on a short-term basis that something's become overbought (or) something's become oversold and they'll take advantage of those short-term swings to jump in - but just jump in and jump out."
Investors also remain uncertain as to how effective a U.S. economic stimulus package of $150 billion in tax rebates and corporate incentives will be at staving off a recession, said Chandler.
The TSX index surged 500 points on Tuesday, pulling out of a five-day nosedive that culminated in a 600-point freefall on Monday. The composite managed to end the week 1.2 percent higher, after closing up in three of five sessions.
Next week, all eyes will be on the U.S. Federal Reserve, amid expectations of a further interest rate cut. An emergency 75 basis point cut from the Fed, and a smaller 25 basis point cut from the Bank of Canada, helped the Toronto benchmark index push higher earlier in the week.
Market volume on Friday was 478 million shares worth C$8.4 billion. Advancers outpaced decliners 916 to 674. The blue chip S&P/TSX 60 index closed down 2.00 points, or 0.26 percent, at 755.64.
In New York, stocks ended a two-day rally, as economic uncertainty also took hold south of the border. The Dow Jones industrial average ended down 171.44 points, or 1.38 percent, at 12,207.17 and the Nasdaq composite index fell 34.72 points, or 1.47 percent, to 2,326.20.
Editing by Rob Wilson