February 14, 2008 / 2:50 PM / 11 years ago

Soft financials weigh on Toronto stocks

TORONTO (Reuters) - The Toronto Stock Exchange’s main index was little changed late Thursday morning, with stronger oil and gas issues offset by investor worries over the state of the U.S. economy.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

Declines in the financial sector helped undercut gains elsewhere, as the sector fell 1.1 percent. Sun Life Financial Inc (SLF.TO) sagged C$1.63, or 3.3 percent, to C$47.53 after its fourth-quarter profit rose slightly, but missed expectations.

On the upside, EnCana Corp (ECA.TO) helped the energy sector push higher after it posted a 63 percent jump in profit. EnCana, Canada’s largest oil and gas company, was up 53 Canadian cents, or 0.8 percent, at C$70.53, while the sector overall rose 0.8 percent.

The S&P/TSX composite index .GSPTSE was down 24.82 points, or 0.19 percent, at 13,257.48, with six of its 10 main sectors in negative territory and one flat.

Also in the oil patch, Nexen Inc NXY.TO added 43 Canadian cents, or 1.5 percent, to C$29.70 after it said its profit more than doubled on rising commodity prices.

A gain in oil prices added to the sector’s upward momentum due to worries over supply. Crude rose $1.93 to $95.20 a barrel.

Investors also had their eyes south of the border amid continued uncertainty over the economic health of the United States, Canada’s largest trading partner.

“The jury, in my view, is still out if we’re going into a recession in the U.S., but the stock market has made the decision until recently that we are either in a recession or going into a recession,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“That’s why we’re seeing a bounce back in the last week or so. People are starting to question if we are going (into a recession) for one, and, secondly, maybe it’s just a period of slow growth.”

Nakamoto said Wednesday’s report of unexpectedly strong U.S. retail sales in January had also helped improve the tone of the market. The TSX has closed higher for four out of the last five sessions, including Wednesday’s 195-point climb.

Investors were also taking in congressional testimony by U.S. Federal Reserve Chairman Ben Bernanke, who said the central bank will act as necessary to help the struggling U.S. economy.

The materials sector edged down 0.1 percent, while its subindex of gold producers dropped 0.6 percent. Barrick Gold (ABX.TO) slid 70 Canadian cents, or 1.4 percent, to C$48.01.

Lundin Mining Corp shed 81 Canadian cents, or 9.3 percent, to C$7.90 after the base metals miner gave a fourth-quarter revenue forecast it said was below analyst expectations.

CAE Inc (CAE.TO), which makes flight simulators, rose 54 Canadian cents, or 4.5 percent, to C$12.64 after it reported higher profit on strong demand for its equipment and services.

($1=$1.00 Canadian)

Reporting by Leah Schnurr; Editing by Rob Wilson

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