February 27, 2008 / 4:09 PM / 11 years ago

CORRECTED - UPDATE 1-Toronto stocks lifted by golds

(Corrects gold producers’ rise in second paragraph to 1.9 percent from 19 percent)

(Updates stock movement, adds details, quotes)

TORONTO, Feb 27 (Reuters) - The Toronto Stock Exchange’s main index was higher on Wednesday morning as gold-mining shares climbed along with the bullion price.

The index’s materials sector was up 1.7 percent, while its subindex of gold producers jumped 1.9 percent, lifted as the price of bullion ran to a record high above $960 an ounce. On Bay Street, Goldcorp (G.TO) rose C$1.24, or 3 percent, to C$42.68, and Barrick Gold (ABX.TO) gained 74 Canadian cents, or 1.5 percent, to C$50.44.

But gains were held back by declines in Nortel Networks Corp NT.TONT.N and Magna International MGa.TO. The two companies were among the biggest drags by weight on the Toronto benchmark, after reporting fourth-quarter financial results before the opening bell.

Nortel was down C$1.52, or 13.6 percent, at C$9.69 after it said a steep one-time tax charge was to blame for a bigger loss. The company, North America’s biggest telephone equipment maker, also said it will cut 2,100 jobs and relocate a further 1,000.

Meanwhile, Magna shed C$1.95, or 2.4 percent, to C$78.05 after the auto-parts maker reported a lower quarterly profit, stung by a number of charges and gains.

The S&P/TSX composite index .GSPTSE was up 44.08 points, or 0.32 percent, at 13,841.09 with just three of its 10 main sectors in positive territory.

The index also got some support from testimony from U.S. Federal Reserve Chairman Ben Bernanke, who said the central bank will act as necessary to keep problems in the housing and credit markets from further infecting the U.S. economy.

“The risk is still to growth not inflation, the system’s still under stress, the Fed’s ready to act if they have to and they’re seeing sluggish activity, which implies he’s going to remain on course to cut rates at the end of next month,” said Rick Hutcheon, president and chief operating officer at RKH Investments of Bernanke’s statements.

“Really there’s no surprises here,” Hutcheon added.

$1=$0.98 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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