October 3, 2008 / 8:56 PM / 10 years ago

UPDATE 4-Toronto stocks drop on oil despite U.S. bailout OK

*Toronto stocks shed almost 100 points

*S&P/TSX composite drops 11 percent on the week

*Energy shares drag despite U.S. bailout optimism

(Adds details)

By Wojtek Dabrowski

TORONTO, Oct 3 (Reuters) - The Toronto Stock Exchange’s main index finished a turbulent week in negative territory on Friday as weak energy shares weighed on the market despite the passage of a multibillion-dollar Wall Street bailout package by U.S. lawmakers.

Oil edged below $94 a barrel on demand concerns, which appeared to overshadow the bailout-related optimism and provided little comfort to the S&P/TSX composite index .GSPTSE, which has plunged about 11 percent in the past week alone.

“There’s still a lot of concern about the ultimate effect of the bailout will be,” said Elvis Picardo, an independent strategist in Vancouver. “Currently, there’s so much doom and gloom in the market, it’s like there is no safe asset class.”

Energy producers that bolstered the market during its runup in the last few years were among the weaker sectors on Friday. Husky Energy (HSE.TO) fell 4.8 percent to C$39.28. Imperial Oil (IMO.TO) slid 4.5 percent to C$41.51.

The S&P/TSX composite index .GSPTSE fell 97.19 points, or 0.89 percent, to close at 10,803.35. Earlier in the day, it had soared more than 400 points ahead of the U.S. bailout vote.

The S&P/TSX 60 index of Canadian blue chip names gave up 0.7 percent to end at 646.76.

“I think there’s a realization in the market that there are other problems in other regions that need to be cured,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, noting the banking troubles emerging in Europe.

All but two of the benchmark’s 10 main groups fell. The big energy and financials groups gave up 1.78 percent and 1.25 percent, respectively.

The resources-laden materials group rose 1.94 percent as gold producers gained ground. Barrick Gold (ABX.TO) rose 5.1 percent to finish at C$34.95. Goldcorp (G.TO) added 4.9 percent to finish at C$28.86.

In the United States, fears that the $700-billion Wall Street bailout won’t unplug the credit markets or help fight off a recession weighed on the Dow Jones industrial average .DJI, which fell 157.47 points, or 1.5 percent, to close at 10,325.38.

The tech-heavy Nasdaq .NAS fell 29.33 points to finish at 1,947.39.

$1=$1.08 Canadian Reporting by Wojtek Dabrowski; editing by Peter Galloway

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