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By Leah Schnurr
TORONTO, March 4 (Reuters) - The Toronto Stock Exchange’s main index trimmed losses but ended lower on Tuesday due to a selloff in financial and materials shares as commodity prices fell and quarterly results from two major banks disappointed.
It was the third session in a row that the index has finished negative, but late in the day it pulled away from earlier losses of more than 200 points.
The index’s materials sector slid 1.8 percent, while that sector’s gold producers subindex gave up 3.1 percent, hurt by profit-taking after a strong surge the previous session.
Tumbling gold prices also pressured resource shares as a fall in crude oil prices pulled spot gold off recent highs. In Toronto, Barrick Gold (ABX.TO) was down C$2.02, or 3.8 percent, at C$50.90, and Kinross Gold (K.TO) gave up C$1.04, or 4 percent, to C$24.86.
Bank of Montreal (BMO.TO) lost C$1.47, or 3 percent, to C$46.89 after the bank reported a worse-than-expected drop in profit, stung by writedowns related to the capital market and rising provisions for bad loans. Shares of BMO have skidded 17 percent so far this year.
Bank of Nova Scotia (BNS.TO) tumbled after its earnings fell just shy of what the Street expected, as it was also hurt by credit market-related charges and higher loan-loss provisions. Scotiabank finished down 91 Canadian cents, or 2 percent, at C$45.59. The financial sector as a whole was down 0.7 percent.
A broker forecast of more hefty losses for U.S. bank Citigroup (C.N) also added to the sour sentiment in both Canada and the United States.
“Today the action has once again been led by financials on the downside and this has been common factor on both sides of the border,” said Elvis Picardo, investment strategist at Northern Securities Inc., in Vancouver, British Columbia.
“Out here we had Scotiabank and BMO reporting first-quarter profits that missed estimates and the concern again is the extent to which writedowns continue to lurk in the system.”
The S&P/TSX composite index .GSPTSE closed down 67.57 points, or 0.5 percent, at 13,476.81 with six of its 10 main sectors lower. The benchmark has lost almost 3 percent in as many days.
Talk of a rescue plan for U.S. bond insurer Ambac Financial Group Inc ABK.N, as well as covering by investors who have short positions in the market, helped lift the index late in the afternoon, said Sal Masionis, stockbroker at Brant Securities.
As well, the commodities sector managed the edge up 0.2 percent, bouncing back from earlier losses as oil prices fell amid rising U.S. inventories.
Even a larger-than-expected interest rate cut of 50 basis points from the Bank of Canada on Tuesday failed to enthuse the market as investors remained worried about the continuing impact of the credit crunch and the health of global economies.
“We’re definitely seeing traces of pessimism and concern creep back into the markets,” Picardo said.
Market volume was 452 million shares worth C$8.8 billion. Decliners outpaced advancers 1,103 to 500. The blue chip S&P/TSX 60 index .TSE60 closed down 2.22 points, or 0.28 percent, at 791.53.
On Wall Street, the Dow stumbled along with bank stocks but the Nasdaq finished little changed after Cisco Systems Inc’s (CSCO.O) chief executive said he expects economic problems to be short-lived.
The Dow Jones industrial average .DJI was down 45.10 points, or 0.37 percent, at 12,213.80, while the Nasdaq Composite Index .IXIC eked out a gain of 1.68 point, or 0.07 percent, to 2,260.28.
$1=$0.99 Canadian Editing by Peter Galloway