August 8, 2008 / 8:46 PM / 11 years ago

UPDATE 3-Commodity retreat drags Toronto stocks lower

(Updates closing numbers, adds details, quotes)

* TSX slips as resources fall with commodities

* Oil drop provides relief to other sectors

* Data shows unexpectedly large job loss for July

TORONTO, Aug 8 (Reuters) - The Toronto Stock Exchange’s main index ended lower on Friday, held down as resource issues fell alongside commodity prices, while worries over the economy were stoked by an unexpectedly large job loss last month.

Despite sending the heavyweight resource sectors tumbling, the nearly $5 drop in oil provided relief to the index’s other sectors, including consumer and industrial shares. Among consumer stocks, Gildan Activewear (GIL.TO) rose 6.9 percent.

But companies tied to commodities led the downside, including oil and gold producers, as their underlying resources slumped while the U.S. dollar rose. Canadian Natural Resources (CNQ.TO) slid 7.3 percent.

Economic worries were also stirred by data that showed a surprisingly large 55,000 jobs were lost in July, the biggest monthly loss since the 1991 recession.

“The absence of good economic news and the overwhelming weight of the decline in commodity prices is enough to sink our market,” said Rick Hutcheon, president and chief operating officer at RKH Investments.

The S&P/TSX composite index .GSPTSE closed down 43.43 points, or 0.32 percent, at 13,341.74, but just three of its 10 main sectors were in the negative.

The energy and materials sectors were responsible for the lion’s share of the losses, shedding 3.5 percent and 3.4 percent respectively. Canadian Natural fell C$6.07 to C$77.58, while Agnico-Eagle Mines (AEM.TO) slid C$3.84, or 7.1 percent, to C$50.43.

The price of oil sagged $4.82 to $115.20 a barrel as the greenback rose on concerns about slowing European and Asian economies, which fueled worries of lower oil demand.

But the drop in oil prices — which have been a major headwind for consumer and corporate spending — eased worries about the health of the economy overall.

The financials helped put a floor under the index, gaining 2.3 percent, as Canadian Imperial Commerce (CM.TO) rose C$1.35, or 2.2 percent, to C$62.35, while National Bank of Canada (NA.TO) was up C$1.14, or 2.3 percent, at C$51.75.

The consumer discretionary sector added 3 percent, while the industrials group rose 1.4 percent. Gildan gained C$1.82 to C$28.14, while Canadian Pacific Railway (CP.TO) was up C$2.43, or 3.8 percent, at C$67.03.

$1=$1.07 Canadian Reporting by Leah Schnurr; editing by Rob Wilson

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