February 7, 2008 / 10:19 PM / 11 years ago

RPT-UPDATE 4-Toronto stock index rallies back in choppy action

(Refiles to fix typo, dropped word in headline) (Adds details, quotes)

By Leah Schnurr

TORONTO, Feb 7 (Reuters) - After a see-saw session, the Toronto Stock Exchange’s main index ended higher on Thursday, with gains in resource and banking shares tempered by worries over the state of the U.S. economy.

The S&P/TSX composite index .GSPTSE closed up 58.17 points, or 0.45 percent, at 12,925.37, the first time in three days it has ended higher. All but two of its 10 main groups were in positive territory with modest gains.

The index managed to bounce back from early losses that had been sparked by more concerns over a slowdown in the U.S. economy amid bad news from Cisco Systems Inc (CSCO.O) and Wal-Mart Stores (WMT.N).

But investor uncertainty kept the TSX benchmark from making large gains even though key commodity prices moved higher.

The energy and materials sectors rose 0.8 percent and 0.4 percent respectively as oil and gold prices climbed. Suncor Energy (SU.TO) rose C$1.25, or 1.4 percent, to C$93.05, while Teck Cominco TCKb.TO was up C$1.19, or 3.6 percent, at C$34.67.

NovaGold Resources Inc (NG.TO) rose 4 Canadian cents, or 0.4 percent, to C$11.09 after it raised the resource levels for its Donlin Creek gold development in Alaska, and said it was hoping to expand the project.

Financials, the biggest group in the index, moved up 0.8 percent, as investors scooped up bargains in the sector, which has been battered by continued fallout from the slump in the U.S. housing market.

Royal Bank of Canada (RY.TO) rose C$1.17, or 2.3 percent, to C$51.29, and Toronto-Dominion Bank (TD.TO) added 62 Canadian cents, or 0.9 percent, to C$67.30. The sector overall has lost almost 6 percent since the start of January.

“There’s a fair amount of anxiety in the marketplace,” said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

“That’s why I’m saying banks are up today because people can’t help themselves from doing a little bottom-feeding because they’ve come down so far, but it’s not with any huge volume or conviction that it’s happening.”

Chandler said that while earnings expectations for the major banks are low, investors will be watching what they have to say about their outlook for the coming quarters.

On the earnings front, Canadian Tire Corp’s (CTC.TO) (CTCa.TO) more actively traded class A shares were down 78 Canadian cents, or 1.2 percent, at C$62.82 after the retailer said fourth-quarter profit rose but warned that earnings gains will be “tempered” by big investments.

Grocer Loblaw Cos Ltd (L.TO) dipped 7 Canadian cents, or 0.2 percent, to C$30.73 after it said fourth-quarter adjusted profit fell nearly 16 percent as it cut prices to hold on to customers.

Thomson Corp TOC.TO TOC.N posted higher earnings for the quarter and upped its dividend, but its shares slipped 28 Canadian cents, or 0.8 percent, to C$34.86. The electronic publisher is buying financial data and news provider Reuters Group Plc RTR.L RTRSY.O for about $16 billion.

“They looked pretty good. I think the problem with Thomson is that everyone is waiting for the completion of the Reuters takeover, and that just keeps dragging on and seems to be a mitigating factor,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.

Market volume was 364 million shares worth C$6.5 billion. Decliners outpaced advancers 766 to 754. The blue chip S&P/TSX 60 index .TSE60 closed up 3.30 points, or 0.44 percent, at 755.66.

Stocks in the United States also broke their three-day slump, as bargain-hunting called investors back to the market. The Dow Jones industrial average .DJI was up 46.90 points, or 0.38 percent, at 12,247.00, and the Nasdaq composite index .IXIC rose 14.28 points, or 0.63 percent, to 2,293.03.

$1=$1.01 Canadian Editing by Rob Wilson

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