April 10, 2008 / 3:16 PM / 11 years ago

UPDATE 1-Toronto stocks little changed, MDA weighs

(Updates to midmorning)

TORONTO, April 10 (Reuters) - The Toronto Stock Exchange’s main index was little changed on Thursday morning, held down by a big drop in MacDonald Dettwiler and Associates MDA.TOshares after the Canadian government blocked the sale of its satellite unit to a U.S. company.

MDA was the biggest loser by weight, down C$4.23, or 9 percent, at C$42.62, following the government’s unprecedented move to block the sale to rocket-maker Alliant Techsystems ATK.N.

Investors also took the opportunity to consolidate their positions following a strong advance in recent weeks.

“We had such a rally over the last three weeks, so it has just been overbought and now people are taking profits,” said Paul Gardner, partner and portfolio manager at Avenue Investment Management. “It was time to cool off and sell.”

The S&P/TSX composite index .GSPTSE was up 9.99 points, or 0.07 percent, at 13,760.54 with four of its 10 main sectors higher.

TransAlta Corp (TA.TO) gave the index a boost on news that Unit 4 at its Sundance power plant in Alberta had returned to normal service on Wednesday. TransAlta was up C$2.14, or 6.9 percent, at C$33.35, helping the utilities sector gain 1.6 percent.

The heavyweight energy sector edged up 0.2 percent, but the group was mixed with Imperial Oil (IMO.TO) losing 33 Canadian cents, or 0.6 percent, to C$54.87, while Canadian Natural Resources (CNQ.TO) moved up 94 Canadian cents, or 1.2 percent, to C$79.06.

Gold producers gave up 0.7 percent, with Agnico-Eagle Mines (AEM.TO) down 79 Canadian cents, or 1.1 percent, at C$71.41, and Barrick Gold (ABX.TO) off 31 Canadian cents, or 0.7 percent, at C$44.65.

Oil and gold prices, key underlying commodities for the resource-heavy TSX, dipped on the heels of a strong bounce on Wednesday.

On the earnings front, shares of Forzani Group fell 51 Canadian cents, or 2.9 percent, to C$17.08 even though the sporting goods retailer said its fourth-quarter profit rose by 36 percent due to a tax reduction and a cold winter in Eastern Canada.

Corus Entertainment (CJRb.TO) added 58 Canadian cents, or 3.1 percent, to C$19.20 after its second-quarter profit doubled, helped by strong performance in its broadcasting business.

The benchmark’s recent strong advance came as investors were more hopeful that the worst of the credit crunch was past, but jitters over how much more fallout could yet be seen have reemerged.

“The credit crisis, although it seems to have stabilized for the moment, is still not out of the woods, so people are getting nervous,” Gardner said.

$1=$1.02 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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