Toronto stocks edge lower on U.S. bailout concerns

Wed Sep 24, 2008 6:39pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index ended slightly lower on Wednesday, plagued by uncertainty over the U.S. bailout plan.

The proposed $700 billion bailout plan in the United States remained front and center of investors' minds as Congress debated the measures that would see the U.S. government buy up soured mortgage debt from financial institutions.

Anxiety over when and if the proposal will pass added to choppy activity during the session, while the energy sector was dampened by soft oil prices. In the oil patch, Canadian Natural Resources slid 2.2 percent to C$82.15.

"If this thing came out and was passed today, I think the market would take off," said Rick Hutcheon, president and chief operating officer at RKH Investments, of the U.S. bailout.

"But the market is getting worried that something is going to happen to derail this thing, or that it's going to take so long that it's going to be ineffective by the time it actually gets (passed)," Hutcheon added.

The S&P/TSX composite index closed down 19.27 points, or 0.15 percent, at 12,513.36 with seven of its 10 main sectors down. The index had jumped just over 130 points earlier in the day.

The materials sector gave back some of the morning's gains, but held onto a 0.8 percent advance, as gold producers were lifted by a modest gain in gold. U.S. gold futures settled up $3.80 at $895.00 an ounce, while in Toronto, Barrick Gold rose 3 percent to C$39.95.

Elsewhere in the materials sector, Teck Cominco fell 2.1 percent to C$34.79, while the heavyweight energy sector gave up 0.6 percent as oil fell on worries over demand. Imperial Oil fell 1.4 percent to C$45.35.   Continued...