April 23, 2008 / 3:53 PM / 11 years ago

UPDATE 2-Toronto stocks pare losses, still in the red

(Adds details, analyst’s view, updates stock movement)

By Jonathan Spicer

TORONTO, April 23 (Reuters) - The Toronto Stock Exchange’s main index pared some early losses but remained down 0.4 percent on Wednesday as falling commodity prices took a toll on gold and energy stocks.

A rebounding U.S. dollar knocked the wind out of spot gold and crude oil prices, pushing down the resource-heavy Toronto benchmark.

Adding to the downside momentum, data showed retail sales unexpectedly fell in February, a sign that the Canadian consumer may be retreating amid an overall economic slowdown. For details, see: [nN23473096]

Tim Burt, president and chief investment officer at Cardinal Capital Management in Winnipeg, Manitoba, said that eventually the slowdown will undermine rising commodities.

“A lot of the commodity prices that we’re seeing now are unsustainably high and driven up by speculators ... so maybe we’re seeing the start of a short-term correction,” he said.

The S&P/TSX composite index .GSPTSE was down 62.78 points at 14,162.58 after falling more than 100 points in earlier action.

The materials group fell 1.2 percent, with its gold subsector off 1.5 percent. Barrick Gold (ABX.TO), the world’s leading gold producer, fell 65 Canadian cents to C$42.55.

Lundin Mining (LUN.TO) stumbled 16 Canadian cents to C$7.61 after it said the cost of developing its Tenke joint venture in the Democratic Republic of Congo had nearly doubled. For details, see: [nN23407271]

The TSX energy sector, down 0.8 percent, was led lower by Suncor Energy (SU.TO), which dropped C$2.54 to C$118.53. Precision Drilling Trust PD_u.TO fell C$1.04 to C$25.95 after it delivered a lower capital spending forecast. See: [nN23409891]

In the financial sector, which dipped 0.4 percent, Royal Bank of Canada (RY.TO) was down 20 Canadian cents at C$47.83.

The overall decline would have been worse if not for a bounce in index heavyweight Research In Motion RIM.TO, up C$2.34 at C$124.70 as the Street anticipated robust profits from RIM’s U.S. tech peer Apple (AAPL.O). ($1=$1.02 Canadian) (Reporting by Jonathan Spicer; Editing by Peter Galloway)

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