February 4, 2008 / 10:20 PM / 11 years ago

UPDATE 3-Toronto stocks pulled down by profit-taking

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By Leah Schnurr

TORONTO, Feb 4 (Reuters) - The Toronto Stock Exchange’s main index slid on Monday as gains in the energy sector were undercut by profit-taking among bank and gold issues.

The S&P/TSX composite index .GSPTSE closed down 60.21 points, or 0.45 percent, at 13,258.16 with seven of its 10 main groups on the downside.

The gold-producers subindex, which has enjoyed a strong run since the beginning of the year, retreated 2.9 percent with Barrick Gold (ABX.TO) down C$1.58, or 3.1 percent, at C$49.06.

The group was stung by declines in the price of gold, which also fell on profit-taking and technical selling. The broader materials sector was off 0.8 percent.

Financials, which rose nearly 4 percent on bargain-hunting last week, turned around and shed 1.2 percent. Canadian Imperial Bank of Commerce (CM.TO) was down C$1.84, or 2.5 percent, at C$71.64, while Toronto-Dominion Bank (TD.TO) fell C$1.14, or 1.7 percent, to C$67.89.

“One could say it’s simply profit-taking — those two (sectors) had the biggest bounce,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“Having said that, it’s still rather encouraging. You would think with such a big bounce up, it would be more aggressive profit-taking.”

The benchmark had its best week in months last week, gaining 3.3 percent, as it continued its climb back from mid-January’s massive slump.

On Monday, Bank of Nova Scotia (BNS.TO) lost 54 Canadian cents, or 1.1 percent, to C$48.29 after it said it was buying banking operations in Guatemala and the Dominican Republic.

Banking shares also hurt by persistent concerns over the health of monoline bond insurers, said John Ing, president of Maison Placements Canada.

Some companies used bond insurers to hedge investments in subprime securities, but investors have become concerned that these insurers now could also fail.

Coventree Inc COF.TO was the biggest percentage loser, after the small structured-finance firm said on Friday it expects to wind up its business. Coventree, which is at the center of troubles in the nonbank asset-backed commercial paper market, was down 29 Canadian cents, or 34.5 percent, at 55 Canadian cents.

Teck Cominco Ltd TCKb.TO bucked the trend, to finish up C$1.91, or 5.5 percent, at C$36.81. The base metal miner denied rumors on Friday that there were problems at its Red Dog zinc mine, but cut its 2008 production estimate for its Highland Valley copper mine.

Also on the upside, the heavyweight energy sector added 0.8 percent as the price of March crude climbed $1.06, or 1.19 percent, to $90.02.

Suncor Energy (SU.TO) rose C$1.16, or 1.2 percent, to C$95.98, and Petrobank Energy and Resources Ltd PBG.TO was up C$3.10, or 6 percent, at C$55.00.

Elsewhere, consumer goods manufacturer Dorel Industries (DIIb.TO) jumped C$2.75, or 9.4 percent, to C$32.00 after it said it will buy Cannondale Bicycle Corp, putting Dorel into the high-end bike market.

Market volume was 345 million shares worth C$6.4 billion. Advancers outpaced decliners 816 to 741. The blue chip S&P/TSX 60 index .TSE60 closed down 3.58 points, or 0.46 percent, at 775.43.

In New York, stocks fell amid brokerage downgrades of banks and credit card companies, heightening worries over a U.S. recession. The Dow Jones industrial average .DJI was down 108.03, or 0.85 percent, at 12,635.16, and the Nasdaq Composite Index .IXIC fell 30.51 points, or 1.26 percent, to 2,382.85. (Editing by Peter Galloway) ($1=$0.99 Canadian)

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