August 29, 2008 / 9:24 PM / 9 years ago

UPDATE 3-Toronto stocks inch up as energy shares rise

* TSX ends little changed as energy shares rise

* Techs hit by worries over corporate spending

* Economic numbers set a sour tone (Adds details, quotes)

By Leah Schnurr

TORONTO, Aug 29 (Reuters) - The Toronto Stock Exchange’s main index climbed slightly on Friday, lifted by energy issues that helped offset tech shares that were hurt by concerns of a weakening appetite for business spending.

Economic news set the tone early after data showed the Canadian economy had a slight 0.3 percent annual growth rate in the second quarter and narrowly escaped falling into a recession, generally defined as two quarters of decline in a row. See: [ID:nN29445075].

Technology shares were bruised by worries that the sector could falter after bellwether Dell Inc DELL.O said companies are cutting back on tech spending.

The comments helped make Research In Motion RIM.TO the biggest drag by weight on the Toronto index, as the BlackBerry-maker fell 3.1 percent to C$129.37. The group overall lost 0.4 percent.

Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri, said that while the economic numbers set a sour tone, the limited market reaction showed investors were more interested in the outlook going forward.

“While, yes, it says things were worse than we actually thought then, it doesn’t necessarily tell us a lot about what happens next,” said Warne.

“The things that are interesting is that while growth has been slower than expected, the things that are underlying it show a slowdown in consumer spending, which is no surprise.”

The S&P/TSX composite index .GSPTSE closed up 20.77 points, or 0.15 percent, at 13,771.25 with all but two of its 10 main sectors rising ahead of the Labour Day long weekend.

On the upside, the energy sector rose 0.8 percent as investors kept their eyes on Hurricane Gustav, which was projected to enter the Gulf of Mexico early next week.

Oil edged down to settle at $115.46 a barrel after climbing earlier in the day as anxiety over potential damage to oil refineries and platforms in the Gulf eased.

Suncor Energy SU.TO rose 1.4 percent to C$60.80, while Canadian Natural Resources CNQ.TO added 0.7 percent to C$90.64.

The Toronto benchmark gained 1.3 percent for the month and 2.4 percent for the week, which was buoyed by a rally in the financial sector as the banks reported results that were not as dire as some had feared.

The financial sector inched up 0.2 percent on Friday, while Canadian Imperial Bank of Commerce CM.TO was up 2 percent at C$64.17.

Douglas Davis, president of Davis-Rea, said that the earnings had lifted optimism over the banks, which have been hit by fallout from the U.S. credit crunch, although he added the group was weakened by profit-taking on Friday.

Market volume was 281 million shares worth C$4.9 billion. Advancers outpaced decliners 982 to 532. The blue chip S&P/TSX 60 index .TSE60 closed up 0.48 point, or 0.06 percent, at 821.69.

On Wall Street, stocks were dragged down by tech shares that were hurt by Dell’s warning as well as weak economic data. The Dow Jones industrial average .DJI closed down 171.22 points, or 1.46 percent, at 11,543.96, while the tech-heavy Nasdaq composite index .IXIC fell 44.12 points, or 1.83 percent, to 2,367.52. ($1=$1.06 Canadian) (Editing by Rob Wilson)

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