January 4, 2008 / 3:53 PM / 11 years ago

UPDATE 1-Toronto stocks slide as resource issues ease

(Updates numbers, adds details, quotes)

TORONTO, Jan 4 (Reuters) - The Toronto Stock Exchange’s main index was down sharply on Friday morning, pulled lower by soft oil prices and worries over the prospect of a recession in the United States.

The index’s materials and energy sectors led the way down, slipping 1.3 percent and 0.9 percent respectively, as gold and oil prices eased back from Thursday’s highs.

Barrick Gold (ABX.TO) was off 58 Canadian cents, or 1.2 percent, at C$47.85, while the gold-mining subsector as a whole was down 1 percent. In the energy group, Canadian Natural Resources (CNQ.TO) slipped 88 Canadian cents, or 1.2 percent, to C$74.48.

The key S&P/TSX composite index .GSPTSE was down 131.19 points, or 0.94 percent, at 13,847.01 with all of the TSX’s 10 main sectors in negative territory shortly after the open.

The selloff came after two days during which record high oil and gold prices supported the resource-laden Toronto index. Spot gold advanced on Friday, but was still off Thursday’s record high of $869.05.

Crude oil was down $1.03 at $98.15 a barrel after briefly touching a record $100.09 the day before.

Weaker-than-expected data on U.S. December job growth also helped undercut the Toronto index, due to heightened concern about the U.S. economy.

“It’s all economic data this week,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc. “So it’s really a question of how strong or how weak the underlying economy is.”

“Where on Wednesday the U.S. market was strongly down on the (Institute for Supply Management), at least strong commodity prices, principally oil and gold, held (Canada) in, but today that trend is reversing itself,” Taylor said.

On Wednesday, the Institute for Supply Management reported that factory activity in the United States shrank unexpectedly in December, raising worries of a recession or stagflation.

The financials sector dropped 0.7 percent on Friday morning. Bank of Montreal (BMO.TO) was down 76 Canadian cents, or 1.4 percent, at C$55.28, and Bank of Nova Scotia (BNS.TO) dipped 60 Canadian cents, or 1.2 percent, to C$48.40. ($1=$1.00 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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