August 13, 2008 / 3:07 PM / 11 years ago

UPDATE 1-Toronto stocks flat as US economy jitters persist

(Updates to midmorning)

*TSX index little changed, resources offset economic worry

*Resource sectors gain along with gold and oil

*Financials fall amid concerns of U.S. economic outlook

*Gildan falls after reports quarterly earnings

TORONTO, Aug 13 (Reuters) - The Toronto Stock Exchange’s main index was little changed on Wednesday morning as worries over the outlook for the U.S. economy were offset by resource shares, which rose with commodity prices.

On the upside, the heavyweight energy and materials sectors provided support, heartened by a gain in gold, while oil pushed up more than $2 following U.S. inventory data. In the oil patch, Canadian Natural Resources (CNQ.TO) rose 2.2 percent.

But the financial sector dragged as bank stocks were hurt by concern over the U.S. economy as well as continuing worries over more fallout from the credit crunch.

U.S. data showed retail sales edged down in July on another big drop at auto dealers, raising worries about the consumer’s ability to keep spending in the face of rising prices.

“They keep saying they they don’t know if we’re in a recession or not, but it’s fairly apparent North America is in recession,” said Douglas Davis, president at Davis-Rea.

“So retail sales dropping definitely will effect consumer confidence,” Davis added.

The S&P/TSX composite index .GSPTSE was was up 8.89 points, or 0.07 percent, at 13,175.89 with just two of its 10 main sectors climbing.

Among laggards in the banking group, Canadian Imperial Bank of Commerce (CM.TO) fell C$1.78, or 2.9 percent, to C$60.13, and Toronto-Dominion Bank (TD.TO) was down C$1.44, or 2.3 percent, at C$61.43. The sector fell 2 percent.

Also in the group, ING Canada IIC.TO slipped 83 Canadian cents, or 2.1 percent, to C$37.87 after the home and auto insurer said profit fell as weak equity markets hurt investment gains and severe weather stung underwriting income.

The energy and materials sectors were the only two groups in positive territory, gaining 1 percent and 3.4 percent, respectively. Canadian Natural rose C$1.77 to C$80.65, while Agnico-Eagle Mines (AEM.TO) rose C$2.48, or 4.8 percent, to C$54.40,

Gildan Activewear (GIL.TO) was among the biggest net losers after it said third-quarter profit rose slightly as a better product mix helped offset restructuring charges, but excluding charges, adjusted net earnings slipped. The T-shirt maker was down C$2.02, or 6.9 percent, at C$27.47.

Health stocks also weighed, giving up 3.5 percent. Biovail Corp BVF.TO fell after it reported a quarterly loss, hurt by restructuring charges and legal and proxy contest costs.

Biovail, Canada’s biggest publicly traded drugmaker, fell 26 Canadian cents, or 2.5 percent, to C$10.24. ($1=$1.07 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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