May 14, 2008 / 9:09 PM / 11 years ago

UPDATE 3-Toronto stocks give up early gains to end flat

(Adds details, quotes)

*Index trims gains to close little changed

*Soft resource shares offset stronger in financials

*Royal Bank of Canada rises after says will take writedown

By Leah Schnurr

TORONTO, May 14 (Reuters) - The Toronto Stock Exchange’s main index gave up nearly all its gains on Wednesday, as weak resources undermined a rally by financial issues after Royal Bank of Canada (RY.TO) said it would take a smaller second-quarter writedown than had been expected.

Miners were among the companies that led the retreat, including Inmet Mining IMN.TO, as the start date of its Las Cruces copper project was put in doubt after Spain’s water authority suspended a water permit. Inmet gave up C$9.49, or 12.3 percent, at C$67.50.

The financial sector pushed higher, with shares of Royal up C$1.23, or 2.5 percent, at C$49.85 after Canada’s largest bank said it will see a pretax writedown of C$855 million amid liquidity pressures on its assets.

“There’s so many rumors floating around on what (banks’) exposures are,” said Sal Masionis, stockbroker at Brant Securities. “So obviously it’s quite nice to have a rally.”

The S&P/TSX composite index .GSPTSE closed up 9.61 points, or 0.07 percent, at 14,626.31 with half of the 10 main sectors higher.

The banking group, which has been battered by global losses and writedowns stemming from the credit crunch and deteriorating U.S. housing market, rose 1 percent.

The sector had earlier helped the benchmark jump to a record high of 14,737.18, surpassing the 14,695.75 mark that was reached on Monday.

Canadian Imperial Bank of Commerce (CM.TO) added 76 Canadian cents, or 1 percent, to C$74.01, and Toronto-Dominion Bank (TD.TO) rose 57 Canadian cents, or 0.9 percent, to C$67.57.

Gold producers fell 1.7 percent, while the price of bullion slid slightly. Agnico-Eagle Mines (AEM.TO) was down C$1.50, or 2.3 percent, at C$63.91, while the broader materials sector was off 0.9 percent.

“I would suggest on an intermediate trend, it looks like gold wants to rally,” said Andrew Martyn, portfolio manager at Davis-Rea.

“So I think from an entry point of view, gold is looking extremely good, and you’ve got some quality stocks that have traded off here.”

The small health care sector was down 1.1 percent, while Cardiome Pharma COM.TO lost 37 Canadian cents, or 3.8 percent, to C$9.30.

The industrials sector put on 1.3 percent, helped by a gain in plane and train maker Bombardier (BBDb.TO), which was up 20 Canadian cents, or 3.1 percent, at C$6.67.

Economic data out of the United States had helped set an upbeat tone earlier in the day after consumer prices rose less than expected last month, which calmed fears of inflation.

Market volume was 405 million shares worth C$7.5 billion. Decliners outpaced advancers 817 to 776. The blue chip S&P/TSX 60 index .TSE60 eked out a gain of 0.82 point, or 0.09 percent, at 871.59.

In New York, stocks were heartened by the tame inflation data, as well as stronger than expected results from retailers Macy’s (M.N) and mortgage company Freddie Mac FRE.N.

The Dow Jones industrial average .DJI closed up 66.20 points, or 0.52 percent, at 12,898.38, while the Nasdaq composite index .IXIC inched up 1.58 points, or 0.06 percent, at 2,496.70. ($1=$1.00 Canadian) (Editing by Rob Wilson)

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