July 29, 2010 / 4:46 PM / 9 years ago

CANADA STOCKS-TSX drops on weak energy shares, miners

*TSX down 38.19 points, or 0.33 percent, at 11,658.44

*Energy issues lead TSX lower (Updates to midday, adds quote)

By Jennifer Kwan

TORONTO, July 29 (Reuters) - Toronto’s main stock index was lower at midday on Thursday as weakness in energy and mining issues eroded an early rally.

Hurt by some weak earnings, energy shares, down 0.7 percent, led the move lower even though the price of oil climbed, in part on weekly U.S. jobless data that sparked cautious optimism about economic recovery. [O/R] [ID:nN29193862]

“We came out of the gate pretty strong and there just wasn’t any follow through,” said Bruce Latimer, trader at Dundee Securities.

“I think buyers have just stepped back a little bit here and just trying to see how low these stocks want to come in before they start buying again.”

Cenovus Energy (CVE.TO) dropped 5.3 percent to C$28.38 after reporting quarterly results that came in below expectations. [ID:nN29245254]

Canadian Oil Sands Trust COS_u.TO fell 2.7 percent to C$27.82, and Enbridge Inc (ENB.TO), fighting a big oil pipeline spill into a Michigan river, dropped 1.9 percent to C$49.57.

At 12:15 p.m. (1615 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 38.19 points, or 0.33 percent, at 11,658.44, with eight of its 10 main sectors lower.

Earlier, the TSX had rallied on strong commodity prices and robust quarterly earnings from heavyweight companies including Barrick Gold (ABX.TO) and Suncor Energy (SU.TO).

Also weighing on the TSX were mining companies including First Quantum Minerals (FM.TO), down 4.3 percent at C$67.72. Gold miner Agnico-Eagle Mines (AEM.TO) dropped 1.3 percent to C$56.50, while Goldcorp (G.TO) fell 1 percent to C$40.00, despite reporting profits on Wednesday. [ID:nN28234234]

“It could be people are just not enthusiastic about the price of gold. The price have gold has come down and it doesn’t look too good on a chart,” said John Kinsey, portfolio manager at Caldwell Securities.

$1=$1.04 Canadian Additional reporting by Claire Sibonney; editing by Peter Galloway

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