Toronto stocks sag along with oil price

Thu Jul 31, 2008 5:41pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index fell on Thursday, sliding late in the session as energy and other resource issues were knocked lower by a drop in oil prices.

The materials sector followed energy stocks lower as gold producers gave up earlier gains. Goldcorp (G.TO: Quote) lost 4.3 percent after it reported an unexpected quarterly loss and said to will buy Gold Eagle Mines GEA.TO for about C$1.5 billion.

Weak U.S. economic data underlined worries about dampening fuel demand and sent oil down $2.69 to settle at $124.08 a barrel. The retreat helped knock 3.1 percent off Canadian Natural Resources (CNQ.TO: Quote).

Sun Life Financial (SLF.TO: Quote) was one of the biggest drags by weight, falling 6.1 percent after reporting its profit fell 12 percent due to weak results at its U.S. insurance and asset-management businesses.

John Kinsey, portfolio manager at Caldwell Securities Ltd, said that Sun Life came in worse than expected, surprising investors although expectations had not been high.

"They had warned after the first quarter that the whole year might be soft because of all the problems everybody knows about - the strong dollar, the weak U.S. economy and the weak U.S. financial markets, and that's basically what hurt them," Kinsey said.

The S&P/TSX composite index .GSPTSE closed down 90.30 points, or 0.66 percent, at 13,592.91, but just three of its 10 main sectors were on the downside, with the bulk of the losses coming from the energy and materials sectors.

The two groups were down 2.5 percent and 1.7 percent, respectively. In the oil patch, Suncor Energy (SU.TO: Quote) was down C$2.76, or 4.7 percent, at C$55.66, and Canadian Natural Resources fell C$2.57 to C$80.01.   Continued...

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