January 11, 2008 / 10:27 PM / 11 years ago

UPDATE 3-RIM weighs but Toronto stocks end little changed

(Adds details, quotes)

By Leah Schnurr

TORONTO, Jan 11 (Reuters) - The Toronto Stock Exchange’s main index ended little changed on Friday, dragged down by nagging worries of a recession in the United States and a drop in Research In Motion after an analyst downgrade.

The BlackBerry-maker was the biggest drag on the index after the downgrade, which was due to fears of a U.S, downturn. RIM RIM.TO finished down C$6.10, or 6 percent, at C$95.70, while the tech sector was off 1.7 percent.

Further worries over the economic health of the United States contributed to a broad-based selloff, heightened by concerns of a slowdown in consumer spending.

The latest jobs data added to the gloomy mood. Statistics Canada reported early in the day that job losses in December were worse than expected and the heaviest since May 2003, which had investors betting the Bank of Canada would cut interest rates.

“I think the theme that’s been going on is the theme of uncertainty and change in the perception in investors’ minds about the level of comfort that they have with the next three months economically,” said Rick Hutcheon, president and chief operating officer of RKH Investments.

“I think people and managers like myself, when they get to a phase in the market — such as we’re in right now — when the future is not clear, tend to sit back and do nothing whatsoever.”

The S&P/TSX composite index .GSPTSE closed down 10.08 points, or 0.07 percent, at 13,632.57 with eight of its 10 main groups ending on the downside. The index was off 1.1 percent for the week.

The consumer discretionary sector led the decline, giving up 1.9 percent, while Shaw Communications Inc (SJRb.TO) fell after the company posted a gain in first-quarter profit but revenue missed expectations. The cable and satellite-TV company was down 84 Canadian cents, or 3.7 percent, at C$22.00.

Gains in resource issues, particularly gold producers, cushioned the fall, while the price of bullion touched yet another record high.

The materials sector and the gold subsector climbed 1.6 percent and 2 percent respectively.

Potash Corp of Saskatchewan POT.TO was up C$5.49, or 4 percent, at C$141.70, and Barrick Gold (ABX.TO) added C$2.26, or 4.5 percent, to C$52.26.

The weak jobs numbers could also be a good thing for the index, as it largely guaranteed a quarter-point rate cut, Hutcheon said, which is typically a boost for markets.

Elsewhere, Quebecor World IQW.TO dropped 30 Canadian cents, or 24.6 percent, to 92 Canadian cents after a report that an arm of Brookfield Asset Management (BAMa.TO) and parent Quebecor Inc (QBRa.TO) (QBRb.TO) were working on a rescue package for the beleaguered commercial printer.

Market volume was 404 million shares worth C$7.5 billion. Decliners outpaced advancers 885 to 727. The blue chip S&P/TSX 60 index .TSE60 closed up 0.42 point, or 0.05 percent, at 802.15.

In New York, stocks tumbled steeply following a warning by American Express Co (AXP.N) of growing credit-card defaults and a decline in consumer spending.

The Dow Jones industrial average .DJI slumped 246.79 points, or 1.92 percent, to 12,606.30, while the Nasdaq composite index .IXIC fell 48.58 points, or 1.95 percent, to 2,439.94.

$1=$1.02 Canadian Editing by Rob Wilson

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