January 6, 2011 / 4:00 PM / 7 years ago

CANADA STOCKS-TSX falls as oil and gold prices slide

*TSX down 19.93 points at 13,376.06

*Energy, materials drag index lower (Updates with details, commentary)

By Claire Sibonney

TORONTO, Jan 6 (Reuters) - Toronto’s main stock index was lower on Thursday morning, its third day of losses, as some commodity prices slipped and some U.S. data disappointed a market that has become optimistic about the outlook for the North American economy.

New U.S. claims for jobless benefits moved higher last week, but a decline in the four-week average to a nearly 2-1/2 year low indicated a trend toward better labor market conditions remained intact. [ID:nN06111595]

U.S. crude oil retreated from $90 a barrel after the data, and gold fell for a fourth straight session as the U.S. dollar firmed and risk appetite improved after a raft of generally better-than-expected U.S. economic indicators. [GOL/] [O/R]

Gold miners extended their recent decline, dropping 1 percent, with Barrick Gold Corp (ABX.TO) losing 1 percent to C$49.34, and Agnico Eagle (AEM.TO) shedding almost 2 percent to C$69.93.

“A lot of commodities have been softer in the new year, particularly the golds have been correcting pretty hard,” said Aaron Fennell, senior market strategist at commodity futures brokerage Lind-Waldock, a division of MF Global.

Fennell said gold was sitting around a significant support level near $1,370 an ounce.

“If it breaks that we might see another leg down but I think generally the traders out there, the gold bulls that are out there are getting a little bit nervous and ... are very quick to abandon their positions both in gold and in the gold stocks.”

The energy sector pulled back 0.7 percent, with Suncor Energy (SU.TO) down 1.3 percent at C$37.76, and Canadian Natural Resources (CNQ.TO) off 2.1 percent at C$43.37.

Natural gas major Encana Corp was also 0.7 percent lower at C$28.95 following an announcement that it will spend less money on operations in 2011 as prices for natural gas remain weak. [ID:nN05292221]

“The interesting part of the energy sector right now is that natural gas is very low and crude oil is very high relative to where they should be,” Fennell said.

At 10:25 a.m. (1525 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 19.93 points, or 0.15 percent, at 13,376.06. Seven of the index’s 10 main groups were higher, however, including the economically sensitive financials, up 0.2 percent.

The base-metals subsector gained 0.3 percent as the price of copper and other materials continued to rally.

Research In Motion RIM.TO sank 2.7 percent to C$60.02 after surging in the last session after the BlackBerry maker said corporate interest in its new tablet was “massive”. [ID:nL3E7C609Q]

Gold Wheaton Gold Corp GLW.TO added 0.4 percent to C$5.01 and its suitor Franco-Nevada Corp FNV.TO, was flat at C$31.90, after amending the terms of the takeover deal, giving Gold Wheaton shareholders an option to get either cash or stock or both. [ID:nSGE705097]

$1=$1.00 Canadian Reporting by Claire Sibonney; editing by Peter Galloway

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