September 11, 2008 / 1:14 PM / 10 years ago

Toronto stocks set for mixed open, commodities eyed

*Oil slips on stronger U.S. dollar

*Base metals firm

*Investors seek stability after Wednesday’s bounce

TORONTO, Sept 11 (Reuters) - The Toronto Stock Exchange’s main index is poised for a mixed open on Thursday, as weakness in commodity prices weigh and investors wait to see if momentum builds from the big rally in the previous session.

Given the market volatility in recent days, the rest of the week is important for gauging market direction, said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

“A lot of people out there would like to see some kind of stability,” said Ibel, noting there could be signs of a trend reversal if the market can maintain a rally for several days.

“If you don’t see that it’s a one-day phenomenon.”

The S&P/TSX composite index .GSPTSE begins the day at 12,497.15, up 350.39 points, or 2.9 percent, as investors scooped up bargains following a week of losses.

The index bounced back on Wednesday but is down 6 percent since Sept 2, as worries over slowing global growth overhang. The sell-off pushed the index closer to a bear market, commonly defined as a 20 percent drop from the peak, which the TSX reached in June.

The heavyweight energy sector could weigh as the price of crude slipped on a firmer U.S. dollar and concerns over weakening demand.

The resource-laden materials group may prove to be mixed as the price of bullion sagged, but some base metals including copper eked out gains.

In economic news, price increases for new homes in Canada eased in July for six months in a row, advancing 0.1 percent, according to Statistics Canada, which added to evidence of a cooling housing market. For details, see [ID:nN11710]

Also, Statistics Canada data showed Canada’s trade surplus narrowed more than expected in July as imports grew twice as fast as exports, and energy exports fell for the first time in nine months.

In earnings, yoga-inspired apparel retailer Lululemon Athletica Inc LLL.TO (LULU.O) said its second-quarter profit rose sharply as it sold more trendy yoga-wear. [ID:nN11395324]

Canada’s No. 2 grocer Empire Co Ltd (EMPa.TO) reported a 47-percent drop in first-quarter profit, as results were hampered without last year’s big capital gains, the company said. But adjusted earnings rose as growth in the core Sobeys supermarket chain offset weakness in the real estate division. [ID:N05398377]

Quarterly results are also expected on Thursday from commercial printer Transcontinental Inc (TCLa.TO).

In New York, stock futures pointed lower on U.S. weekly jobs data and concerns about the health of the U.S. financial sector hit investor sentiment, as Lehman Brothers LEH.N failed to announce deals to raise capital. ($1=$1.1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Scott Anderson)

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