* TSX down 8.38 points, or 0.06 percent, at 13,519.50
* Seven of 10 main sectors rise, materials biggest drag
* Friday’s U.S. nonfarm payrolls awaited
* Progress Energy stock jumps on C$1.07 bln deal (Adds details. Updates to close)
By Ka Yan Ng and Solarina Ho
TORONTO, June 2 (Reuters) - Toronto’s main stock index finished little changed on Thursday, as caution about the global economy took the steam out of an early rally.
The index, which recorded a drop of nearly 2 percent on Wednesday — its biggest one-day slide since Aug. 11 — got a boost earlier from its hefty energy and materials groups.
But both these sectors were well off the day’s highs by session’s end, with materials, down 0.79 percent, leading the slide after a wave of technical selling hit both gold and silver futures. [GOL/]
The energy sector eked out a 0.02 percent rise, having erased nearly all of its early gains. The retreat came as U.S. crude futures extended losses, reacting to a government report showing a surprise rise in U.S. crude stockpiles. [O/R]
“It just speaks to the nervousness or the sense of uncertainty that investors currently feel,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
“We haven’t been able to post a sustainable rally for a few days now. I think the bears currently have the upper hand.”
Barrick Gold (ABX.TO) and Goldcorp (G.TO) were among the biggest drags on the index, helping to send the gold subgroup down nearly 1 percent. Barrick dropped 2.15 percent to C$45.06, while Goldcorp shed 1.16 percent to C$47.58.
Silver Wheaton SLW.TO slipped 2.05 percent to C$34.36, and Imperial Oil (IMO.TO) lost 1.82 percent to C$45.81.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished down 8.38 points, or 0.06 percent, at 13,519.50. Seven of the index’s 10 main sectors were higher.
The index is now up just a scant 0.57 percent on the year and some analysts believe it could be setting up to turn negative.
“This could be a retest of that again,” said John Kurgan, senior market strategist at Lind-Waldock.
“It’s one thing to be down there in the first month or two of the year, but when you’re down there at the midpoint of the year.... it takes on a different type of a feeling.”
NEXT CUE FROM JOBS DATA
While new U.S. claims for unemployment benefits fell by 6,000 last week to a seasonally adjusted 422,000, the labor market by most accounts remains weak. The figure comes ahead of Friday’s key U.S. nonfarm payrolls report for May. [ID:nOAT004815] [ID:nN31283560]
Recent data ranging from consumer spending to manufacturing has suggested the U.S. and other global powerhouse economies, are hitting a soft patch.
“There are more cracks opening up in the economic side, especially in the States. We’ve seen a clear deterioration in the numbers in the last few weeks,” said Andrew Pyle, an associate portfolio manager at ScotiaMcLeod.
“Clearly, if the U.S. employment numbers are not good, then that’s just going to be one more element of concern.”
Markets are already gearing up for a soft read on the U.S. labor market, confirming the economy’s loss of momentum as it grapples with a raft of headwinds ranging from high energy prices and bad weather to supply chain disruptions due to the earthquake in Japan. [ID:nN31283560]
In other company news, Laurentian Bank (LB.TO) fell 4.05 percent to C$49.56 after it reported stronger results but missed expectations. [ID:nN02247242]
Sino-Forest Corp TRE.TO plunged 20.59 percent to C$14.46, making it the second most influential dragger on the index, after a research firm called the company’s revenue accounting structure into question. [ID:nL3E7H22TD]
Progress Energy (PRQ.TO) jumped 4.22 percent to C$14.57 after it said it will sell half its working interest in a joint venture to Malaysia’s state oil firm Petronas for C$1.07 billion ($1.09 billion) to develop its large shale assets in British Columbia. [ID:nL3E7H21VB]
($1=$0.98 Canadian) (Editing by Jeffrey Hodgson)