October 1, 2008 / 8:26 PM / 9 years ago

Toronto stocks weaken on oil ahead of bailout vote

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

TORONTO (Reuters) - The Toronto Stock Exchange’s main index ended lower on Wednesday, pressured by economic worries and weakening oil prices, but it finished well off its morning lows on optimism that U.S. lawmakers will push through a revamped rescue plan for the financial sector.

Continuing oil price volatility pulled energy shares to a 2.7 percent loss as the price of crude fell below $100 a barrel, but the key financial and materials sectors largely held their ground ahead of a U.S. Senate vote on the rescue plan expected later on Wednesday.

“People certainly feel that something’s going to go through. Whether it goes through today, tonight, tomorrow or Friday is anyone’s guess,” said Bruce Latimer, a trader at Dundee Securities.

The S&P/TSX composite index ended the session down 38.39 points, or 0.33 percent, at 11,714.51, a sharp improvement from its 200-point dive at midmorning.

Among energy stocks, Suncor Energy dropped 7.5 percent to C$40.70, while EnCana Corp retreated 3.7 percent to C$65.46.

Seven of the 10 TSX subgroups finished flat or higher, with the financials eking out a 0.66 percent gain and telecoms climbing 3.3 percent. Materials issues finished unchanged, as weakness among base metals producers was offset by strong gold-mining stocks.

Financial issues were led by Sun Life Financial, which climbed 3.5 percent to C$38.50.

Weighing on the materials sector was Teck Cominco, which sank 7.6 percent to C$27.91 on weak copper and zinc prices and a stock downgrade, while gold producer Kinross Gold leapt 5.4 percent to C$18.01 as gold prices rose.

The main index rallied 4 percent on Tuesday on hopes a U.S. rescue deal would be passed this week, but that capped off a month in which the index dropped 15 percent, its worst September performance since 1931.

“I think what we saw today was sort of a wait-and-see market,” said Kate Warne, Canadian markets strategist at Edward Jones in St. Louis.

“I don’t think anybody has any certainty about Congress will do.”

She noted that bleak U.S. employment and manufacturing data released on Wednesday did not bode well for Canadian exporters, and likely weighed on market sentiment.

Trading volume was 448.7 million shares, valued at C$8.0 billion. Declining issues totaled 869, outpacing the 619 that advanced.

The blue-chip S&P/TSX 60 index slid 3.55 points, or 0.50 percent, to 703.79.

U.S. markets also gave back some of the previous day’s sharp gains.

The Dow Jones industrial average slipped 19.59 points, or 0.18 percent, to finish at 10,831.07, while the tech-heavy Nasdaq composite dropped 22.48 points, or 1.07 percent, to 2,069.40.

($1=$1.06 Canadian)

Reporting by Cameron French; Editing by Peter Galloway

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