June 6, 2008 / 8:57 PM / 11 years ago

UPDATE 2-Toronto stocks stumble as oil spurs economic fear

(Updates closing numbers, adds details, quotes)

*Index turns negative after hitting record in morning

*Spike in oil propels resources higher

*Financials and consumer stocks decline on economic fears

TORONTO, June 6 (Reuters) - The Toronto Stock Exchange’s main index ended lower on Friday after oil prices shot up by more than $10, spurring worries about their impact on the economy and erasing a big market gain made early in the day.

The key S&P/TSX composite index .GSPTSE jumped to a record high shortly after the opening bell as resource shares rose with surging commodity prices.

But gains by oil and other resource stocks were not enough to keep the index above water as the impact of the rapid surge in crude began to hit financial and consumer stocks.

In the oil patch, Canadian Natural Resources (CNQ.TO) rose C$2.36, or 2.3 percent, to C$106.00, and Imperial Oil (IMO.TO) added C$1.29, or 2.2 percent, to C$60.93.

The S&P/TSX composite index closed down 13.36 points, or 0.09 percent, at 14,969.55. The energy and materials sectors provided the bulk of the upside, gaining 1.7 percent and 1.2 percent respectively.

“There’s a certain limit with people getting enthusiastic about buying energy stocks and gold stocks,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“But there’s the other side of the equation where they tend to get more negative on the overall outlook for the economy and the overall outlook for consumers.”

Financials led the downside, shedding 1.8 percent, with Canadian Imperial Bank of Commerce (CM.TO) sliding C$1.82, or 2.7 percent, to C$65.18, and Toronto-Dominion Bank (TD.TO) dropping C$1.10, or 1.6 percent, to C$69.03.

Consumer stocks were also stung. The index’s consumer discretionary sector fell 1.3 percent, and the consumer staples group lost 0.9 percent.

Retailer Canadian Tire (CTCa.TO) was off 65 Canadian cents, or 1.1 percent, to C$59.65, and coffee and snacks chain Tim Hortons THI.TO gave up 55 Canadian cents, or 1.7 percent, to C$32.15.

The utilities sector edged up 0.1 percent. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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