February 15, 2008 / 1:59 PM / 11 years ago

Toronto stocks poised to drop on economic jitters

TORONTO, Feb 15 (Reuters) - The Toronto Stock Exchange’s main index was expected to open weaker on Friday, extending the previous session’s decline, as investors remained wary over the prospects for the U.S. economy.

Market watchers were also taking in results from Canada’s No. 2 telephone company Telus Corp (T.TO), which reported higher profit on a large tax adjustment and stronger wireless revenue. For details, see: [nN15546226]

Meanwhile, Domtar Corp (UFS.TO) could see action after the company, which produces uncoated freesheet paper, said it swung to a fourth-quarter loss, hurt by falling prices and rising shipping costs. See: [nN15544660]

Markets on both sides of the border reacted negatively to comments from U.S. Federal Reserve Chairman Ben Bernanke on Thursday. Bernanke said the outlook for the economy had worsened in recent months but expects growth to become somewhat stronger in the second half of the year.

“The market sold off most of yesterday and it looks like we’re going to have a little continuation into that,” said Bruce Latimer, a trader at Dundee Securities.

“I think once again, (Bernanke) just reiterated that things aren’t quite as rosy as thought, and left himself a door open to maneuver if he feels necessary,” said Latimer, adding that activity could be quiet as both Toronto and New York markets will be closed for a holiday on Monday.

The S&P/TSX composite index .GSPTSE starts the day at 13,208.03 after falling 74.27 points in the previous session. The benchmark is up 1.7 percent so far for the week.

U.S. stock index futures were lower amid persistent concerns over the health of the economy and a profit warning from retailer Best Buy Co (BBY.N).

Oil, which often influences the direction of Bay Street’s energy stocks, was up but off an earlier one-month high above $96 a barrel as investors wondered whether Venezuela would make good on its threat to halt shipments to the United States.

Elsewhere on the earnings front, Kingsway Financial Services Inc KFS.TO, which sells truck insurance and auto policies to high-risk North American drivers, was also expected to report fourth-quarter results later in the day.

($1=$1.00 Canadian)

Reporting by Leah Schnurr; Editing by Scott Anderson

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