July 17, 2008 / 5:22 PM / 11 years ago

UPDATE 2-Toronto stocks taken lower by weak energy shares

(Updates to early afternoon)

* TSX retreats as energy sector drags amid weak oil

* Financials boosted by U.S. quarterly results

* Nexen falls after disappointing quarter profit

TORONTO, July 17 (Reuters) - The Toronto Stock Exchange’s main index slid lower on Thursday afternoon, pulled down by retreating energy shares that were stung by weak oil prices amid worries over demand.

The benchmark had gained more than 1 percent earlier in the day, buoyed by financials that benefited from surprisingly healthy quarterly results at U.S. banks.

But weak resource shares helped drag the TSX lower by early afternoon, with Nexen Inc NXY.TO falling sharply on a disappointing quarterly profit.

Nexen tumbled C$3.22, or 8.7 percent, to C$33.74 after it said one-time charges and trading losses nearly wiped out its gains from record high oil prices.

The S&P/TSX composite index .GSPTSE was down 51.75 points, or 0.38 percent, at 13,452.05 at midday, with two of its 10 main sectors lower. It hit a session high of 13,662.51.

The energy sector overall was down 2.6 percent, while Canadian Natural Resources (CNQ.TO) fell C$3.55, or 4 percent, to C$86.10, and Suncor Energy (SU.TO) lost C$1.83, or 3.2 percent, to C$54.77.

Crude slid to around $133 a barrel, adding to a decline of more than $10 this week, amid concerns over U.S. demand and easing political tensions between Iran and the West.

Financials remained up 1.2 percent, although they were off their session highs as investors cashed some profits.

Bank of Montreal (BMO.TO) rose C$1.82, or 4.3 percent, to C$43.75, and Canadian Imperial Bank of Commerce (CM.TO) was up C$1.52, or 2.9 percent, at C$54.71.

Lundin Mining Corp (LUN.TO) added 2.7 percent, or 14 Canadian cents, to C$5.42 after it said it had made a high-grade copper-zinc discovery at its Neves-Corvo mine in southern Portugal. ($1=$1.00 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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