December 3, 2007 / 3:39 PM / in 10 years

UPDATE 1-Profit taking threatens Toronto index's 4-day climb

TORONTO, Dec 3 (Reuters) - Toronto stocks remained weak on Monday as profit taking in the banking group and a slide in the technology group threatened to halt the index’s four-day winning streak.

By midmorning, the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 17.98 points, or 0.1 percent, at 13,671.14 after dropping to as low as 13,635.03 earlier in the day.

The Canadian benchmark index shed 6.4 percent in November, but recovered 1.6 percent in the last week as global stock markets priced in a U.S. interest rate cut later in the month.

The S&P/TSX composite index .GSPTSE started the month at 13,689.12 after rising 25.23 points, or 0.2 percent, in the previous session.

The TSX has logged monthly gains in December in each of the last 10 years.

“People seem to be taking a bit of a pause after last week which ended up not being too bad a week in a dismal month,” said Michael Sprung, president at Sprung and Co Investment Counsel.

But Sprung did not expect too much activity ahead of an expected U.S. interest rate cut next week.

Meanwhile, a majority of Canada’s primary securities dealers expect the Bank of Canada to hold its rates steady at 4.5 percent when it sets its policy on Tuesday, according to a Reuters poll released last week. However, it is expected to cut rates when it makes its next decision in January.

Overall, six of the TSX index’s 10 main groups were lower with financial shares off 0.3 percent and technology issues down 1.2 percent.

Financial shares lost ground after strong gains last week when the country’s biggest banks kicked off their fourth-quarter reporting period.

Bank of Montreal BMO.TO slipped C$1.70 to C$61.74 and National Bank of Canada NA.TO dropped 94 Canadian cents to C$53.04.

National Bank of Canada swung to a fourth-quarter loss last week following a big charge for asset backed commercial paper.

Technology shares followed bellwether issue Research In Motion RIM.TO lower on Monday. RIM, known for its BlackBerry hand-held device, was off C$8.03 at C$105.80.

Industrial shares also dragged the market down as the index’s main railways chugged lower.

Canadian Pacific Railway CP.TO dropped C$1.40 to C$65.24 and Canadian National Railway CNR.TO dipped 33 Canadian cents to C$48.07.

But firm commodity shares tempered the losses with energy shares gaining 0.2 percent and materials issues adding 1.4 percent.

Potash Corp POT.TO gained C$7.40 to C$126.20 and Agrium Inc AGU.TO added C$2.55 to C$59.95.

Agrium said on Monday it would buy UAP Holding Corp UAPH.O in a $2.65 billion deal that will make it North America’s largest agricultural retailer.

$1=$1.00 Canadian Reporting by Scott Anderson; Editing by Bernadette Baum

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