July 25, 2008 / 9:23 PM / 11 years ago

UPDATE 3-Toronto stocks buoyed by earnings from resources

(Adds details, quotes)

* TSX up 1 percent on day, down 1 percent on week

* Resource sectors boosted by strong earnings

* Loblaw down after profit disappoints

By Leah Schnurr

TORONTO, July 25 (Reuters) - The Toronto Stock Exchange’s main index rose 1 percent on Friday, with resource shares climbing on strong earnings from the energy and materials sectors, but the index still recorded its seventh weekly decline in a row.

Among the leaders in the oil patch, Suncor Energy (SU.TO) gained 4 percent, and Petro-Canada PCA.TO rose 2.6 percent, after both companies reported a jump in profit on Thursday.

The sector held up in the face of a $2.23 drop that took crude to $123.26 a barrel on Friday, racking up a decline of more than $23 in two weeks on concerns over faltering demand.

The materials sector, home to resource shares, also saw gains after this week’s quarterly results from Potash Corp of Saskatchewan POT.TO, which rose 4.6 percent, and Fording Canadian Coal Trust FDG_u.TO, which gained 5.8 percent.

“My general sense is what’s happening now in terms of earnings is very good, it’s surprising people on the upside,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“I think myself what you need is some confidence to come back into the market, and I think one of the confidence builders — not the sole one — is good earnings.”

The S&P/TSX composite index .GSPTSE closed up 172.67 points, or 1.31 percent, at 13,378.81 with seven of its 10 main sectors pushing higher.

The index was off 1 percent for the week, its seventh negative week in a row as commodity prices weakened and sour housing data underlined worries over the U.S. economic outlook.

The materials and energy sectors gained 2.2 percent and 1.9 percent, respectively, on Friday. Both of them came back from declines in Thursday’s session.

The materials group also got a lift from gold producers as the price of bullion rose as worries over the U.S. financial sector raised its safe haven appeal.

Potash Corp rose C$9.04 to C$205.89, and Fording gained C$4.46 to C$81.86. In the energy group, Suncor added C$2.13 to C$55.04, and Petro-Canada was up C$1.18 at C$47.22.

“We’ve seen a minor selloff in the industry groups in energy and commodities prior to today’s run-up, so I think the focus is on earnings and you’re getting some investors getting back into those two groups,” said Elvis Picardo, independent strategist in Vancouver.

On the downside, Loblaw Cos (L.TO) fell C$1.12, or 3.7 percent, to C$29.25 after Canada’s biggest supermarket chain came in short of analyst earnings estimates.

The financial sector, which has seen a rally since the middle of last week, rose 0.7 percent, as Bank of Nova Scotia (BNS.TO) added 80 Canadian cents, or 1.7 percent, to C$48.96, and Royal Bank of Canada (RY.TO) was up 69 Canadian cents, or 1.6 percent, at C$44.92.

Market volume was 332 million shares worth C$7.7 billion. Advancers outpaced decliners 763 to 711. The blue chip S&P/TSX 60 index .TSE60 closed up 11.77 points, or 1.49 percent, at 800.34.

In New York, stocks were lifted by the drop in oil as well as stronger-than-expected data on consumer sentiment and housing.

The Dow Jones industrial average .DJI closed up 21.41 points, or 0.19 percent, at 11,370.69, and the Nasdaq Composite Index .IXIC rose 30.42 points, or 1.33 percent, to 2,310.53. ($1=$1.02 Canadian) (Editing by Frank McGurty)

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