January 7, 2008 / 10:36 PM / 11 years ago

UPDATE 3-Toronto stocks sag as resources, financials weigh

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By Leah Schnurr

TORONTO, Jan 7 (Reuters) - The Toronto Stock Exchange’s main index sank on Monday for the second session in a row as resource and financial issues helped drag the market broadly lower.

The index trimmed some of its losses — it was down more than 200 points early in the day — but it still extended Friday’s decline as fears of a recession in the United States also weighed.

Falling oil and gold prices, and worries over the prospect of a global economic slowdown helped drag the energy and materials sectors down 1.2 percent and 1.5 percent respectively.

Suncor Energy (SU.TO) fell C$1.32, or 1.2 percent, to C$108.35, and Barrick Gold (ABX.TO) was down 48 Canadian cents, or 1 percent, at C$47.48.

The financial sector was off 0.7 percent. Toronto-Dominion Bank (TD.TO) fell following rumors in foreign exchange markets that it could be hit with a multibillion-dollar writedown. TD repeated that it has no exposure to the troubled U.S. subprime market, but finished down C$1.46, or 2.2 percent, at C$65.66.

“When it comes to the financials, investors are in the mood to sell first and ask questions later,” said Elvis Picardo, investment strategist at Northern Securities Inc in Vancouver.

“That has been trend for the past few months and with this subprime mortgage mess in the U.S. showing no signs of abating, it’s not surprising to see those stocks trade a little bit to the downside today.”

But Canadian Imperial Bank of Commerce (CM.TO) bucked the trend, rising C$1.02, or 1.5 percent, to C$69.02 after a management shakeup in which it ousted its chief risk officer and the head of its corporate and wholesale banking unit, after being battered by the U.S. subprime fallout.

Overall, the S&P/TSX composite index .GSPTSE closed down 159.71 points, or 1.16 percent, at 13,618.87 with eight of its 10 main groups in negative territory.

The index has lost 2.6 percent in the last two sessions after Friday’s U.S. jobs report fueled jitters over a possible recession in the world’s largest economy.

“The basic equation was that continued jobs growth meant healthier consumer continued spending, and with below-average job growth, I think that’s come into question,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Nakamoto said he expects a rough patch for stocks as investors await quarterly results from financial institutions to see how transparent they will be in disclosing the possibility of more writedowns.

Rogers Communications Inc (RCIb.TO) shed C$2.50, or 5.8 percent, to C$40.95 after it said it added fewer than expected wireless subscribers in the fourth quarter.

The telecoms sector lost 2.3 percent.

Market volume was 352 million shares worth C$6.8 billion. Decliners outpaced advancers 1,008 to 564. The blue chip S&P/TSX 60 index .TSE60 closed down 9.16 points, or 1.14 percent, at 797.48.

In New York, the Dow rose as investors scooped up shares in companies that are seen weathering an economic slowdown, but the Nasdaq fell as tech shares declined.

The Dow Jones industrial average .DJI ended up 27.31 points, or 0.21 percent, at 12,827.49, while the Nasdaq composite index .IXIC was down 5.19 points, or 0.21 percent, at 2,499.46.

$1=$1.00 Canadian

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