TSX falls for 2nd straight day, still up on week

Wed Mar 25, 2009 4:56pm EDT
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By Frank Pingue

TORONTO (Reuters) - Toronto's main stock index closed lower on Wednesday as a slide in oil prices shook the weighty energy sector while disappointing debt auctions rattled U.S. stocks and hurt sentiment in Canada.

Oil prices fell after U.S. data showed crude stocks were at their highest levels since 1993, which sparked a selloff in energy issues, which make up about 22 percent of the Toronto Stock Exchange's main index.

Shares of EnCana Corp fell 2.5 percent to close at C$53.12, while Nexen Inc shares tumbled 4 percent to end the session at C$20.41.

Also weighing on investor sentiment was a debt auction that showed weak demand for the U.S. Treasury's five-year notes. Britain saw its first failed government debt auction since 2002.

"The markets came out of the gate a little strong and when there was no follow through in the morning, that coupled with weak treasury auctions and people started to take profits," said Bruce Latimer, a trader at Dundee Securities.

"But after the move on Monday we are still up on the week so it's just a bit of a consolidation period, and so I am not really too concerned about it."

The S&P/TSX composite index ended down 51.95 points, or 0.59 percent, at 8,797.44, off a session high that had the index up 1.5 percent about one hour after the open.

The TSX has fallen in the past two sessions but remains up 3.4 percent on the week thanks to a massive 5.3 percent gain on Monday when investors cheered a U.S. government plan to rid banks of toxic assets.   Continued...

<p>A sign displays TSX information in Toronto March 23, 2009. REUTERS/Mark Blinch</p>