March 7, 2008 / 10:09 PM / 11 years ago

UPDATE 4-Toronto stocks pulled down by resources, US woes

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By Leah Schnurr

TORONTO, March 7 (Reuters) - The Toronto Stock Exchange’s main index ended firmly lower on Friday, trimming earlier losses in a choppy day but still weighed down by falling resource issues and jitters over the U.S. economy.

Even an unexpectedly big increase in Canadian jobs last month failed to lift the index, which took an early cue from weak U.S. employment data for February.

Statistics Canada said five times more jobs than anticipated were added in February, signaling the economy is racing ahead even as exports sag amid the U.S. downturn.

But investors remained worried by the outlook for the U.S. economy, and the impact on Canada, after U.S. employers cut jobs in February at the steepest rate in nearly five years.

“I think the unlimited flow of bad news out of the U.S. is dampening any sort of positive sentiment on this side of the border,” said Elvis Picardo, investment strategist at Northern Securities Inc in Vancouver, British Columbia.

“Today is a classic case: We had job growth in Canada that trumped the most optimistic estimates, and yet all the focus has been on what’s happening in the U.S.”

The S&P/TSX composite index .GSPTSE closed down 78.72 points, or 0.59 percent, at 13,281.72 with six of its 10 main groups negative. The index was down 2.2 percent in a week that included both a triple-digit loss and gain. It was lower in four out of the five days.

Resource shares led the TSX lower amid profit-taking and concerns that record highs seen by commodity prices might not be sustainable.

Suncor Energy (SU.TO) was down C$2.04, or 1.9 percent, at C$105.73, while Goldcorp (G.TO) slid C$1.36, or 3.1 percent, to C$42.62. The materials and energy sectors gave up 2.1 percent and 1 percent respectively.

The financial sector was a bright spot, edging up 0.6 percent after days of hefty losses. The group had fallen for seven sessions in a row in which it knocked off more than 9 percent of its worth. Analysts said bargain-hunting and short-covering helped push the stocks higher.

“If you look at the dividend yields on some of these bank stocks, they’re phenomenal and I think there’s some bottom fishing going on in that sector,” Picardo said. “It’s been really badly beaten down.”

Bank of Montreal (BMO.TO) was also able to snap its losing streak, moving up C$1.13, or 2.7 percent, to C$43.10. A seven-session decline for BMO cut its stock down by about 23 percent as investors fretted over the health of its structured-credit investments. The higher loan loss provisions it announced earlier in the week also fueled concern.

Also in the sector, Canadian Imperial Bank of Commerce (CM.TO) rose 92 Canadian cents, or 1.5 percent, to C$62.50.

NovaGold Resources ended down 59 Canadian cents, or 5.6 percent, at C$10.00 after the company said it was withdrawing a C$130-million share offering which it had announced the night before. The gold producer blamed price conditions.

Contract drugmaker Patheon PTI.TO shed 22 Canadian cents, or 6.5 percent, to C$3.18 after it posted a bigger first-quarter loss due to losses at its operations in Puerto Rico and the weak U.S. dollar.

Market volume was 426 million shares worth C$7.3 billion. Decliners outpaced advancers 1,083 to 512. The blue chip S&P/TSX 60 index .TSE60 closed down 4.43 points, or 0.56 percent, at 780.10.

In New York, stocks were battered by the negative job report, deepening fears that the United States is tipping into a recession. The Dow Jones industrial average .DJI was down 146.70 points, or 1.22 points, at 11,893.69, and the Nasdaq Composite Index .IXIC dipped 8.01 points, or 0.36 percent, to 2,212.49.

$1=$0.99 Canadian Editing by Peter Galloway

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