January 29, 2008 / 3:44 PM / 11 years ago

UPDATE 1-Toronto stocks edge higher ahead of Fed move

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TORONTO, Jan 29 (Reuters) - Toronto stocks edged cautiously higher on Tuesday morning amid wariness ahead of the U.S. Federal Reserve’s decision on interest rates on Wednesday and as a record high gold price spurred profit-taking in gold-mining shares.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 26.79 points, or 0.2 percent, at 13,013.69 after briefly dipping into negative territory.

Eight of the index’s 10 groups were higher, led by a 1.9 percent boost from the industrials group and a 0.7 percent climb among utilities.

But many investors seemed content to sit on the sidelines ahead of a U.S. rate announcement.

“Until the (Federal Reserve) makes its pronouncement, I think we’ll wallow about,” said Rick Hutcheon, president and chief investment officer at RKH Investments.

The Fed surprised investors last week with an emergency rate cut of 75 basis points and more rate cuts are expected this week, with wide debate over whether it will be 25 or 50 basis points.

Industrial shares were led higher by railway companies after Canadian Pacific (CP.TO) said on Tuesday that lower income tax rates helped double its fourth-quarter earnings.

CPR, the country’s second-biggest railway, was up C$3.90, or 6 percent, at C$68.80, while rival Canadian National Railway (CNR.TO) added 74 Canadian cents to C$49.92.

Interest-rate sensitive utilities shares were boosted by Canadian Utilities (CU.TO), which added 92 Canadian cents to C$49.29, and TransAlta (TA.TO), which gained 10 Canadian cents to C$30.95.

But weak gold shares kept the gains under wraps as the price for the precious metal touched record levels above $933 an ounce, prompting a fresh round of profit-taking.

Goldcorp (G.TO), the country’s No. 2 producer, dropped 74 Canadian cents to C$37.74, while Royal Gold Inc (RGLD.O) slipped 65 Canadian cents to C$31.01. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Peter Galloway)

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