August 18, 2008 / 7:07 PM / 9 years ago

UPDATE 2-Toronto stocks flat as financials weigh

(Updates to midafternoon)

* TSX retreats from earlier gains

* Banks weighed by worries over credit crunch fallout

* Gold producers gain along with commodity

TORONTO, Aug 18 (Reuters) - The Toronto Stock Exchange’s main index was little changed on Monday afternoon, easing off an earlier advance while weak financials offset gains by resource shares as worries over more fallout from the credit crisis took hold.

The materials sector managed to hold on to its advance as it was lifted by gold producers, which gained along with their underlying commodity. Goldcorp (G.TO) rose more than 3 percent.

But the large financial sector weighed as it was dragged down by a selloff in banks south of the border, as mortgage finance giants Fannie Mae FNM.N and Freddie Mac FRE.N tumbled after a report suggested the U.S. Treasury could recapitalize the companies.

Among the laggards on Bay Street, Canadian Imperial Bank of Commerce (CM.TO) slid more than 1 percent. The major Canadian banks are set to report quarterly results next week.

“Until the results out of our banks come out, I think that our market is going to go in limbo for a while,” said Joe Ismail, technical analyst at Maison Placements Canada.

The S&P/TSX composite index .GSPTSE was up 14.70 points, or 0.11 percent, at 13,111.40 in the afternoon after climbing as high as 13,234.81 earlier in the session. Of its 10 main sectors, six were higher.

The financial group was down 1 percent, with CIBC easing 1.4 percent to C$60.33, and Bank of Montreal (BMO.TO) falling 1.8 percent to C$46.37.

The materials sector, home to resources, climbed 1.9 percent with the help of gains by gold producers. Agnico-Eagle Mines (AEM.TO) rose 5.7 percent to C$54.22, and Goldcorp was up 3.6 percent at C$32.27.

Shares of Corel Corp bounced higher after falling earlier as the software developer said its majority shareholder had withdrawn its offer to buy out the rest of the company. Corel was up 1.5 percent at C$9.75. ($1=$1.06 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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