July 31, 2008 / 9:13 PM / 9 years ago

UPDATE 2-Toronto stocks falter as oil price drops

(Updates closing numbers, adds details)

* TSX falls as resource issues weigh

* Sun Life sags as profit hit by U.S. operations

* Rothmans up after bid from Philip Morris

TORONTO, July 31 (Reuters) - The Toronto Stock Exchange’s main index fell on Thursday, sliding late in the session as energy and other resource issues were knocked lower by a drop in oil prices.

The materials sector followed energy stocks lower as gold producers gave up earlier gains. Goldcorp G.TO lost 4.3 percent after it reported an unexpected quarterly loss and said to will buy Gold Eagle Mines GEA.TO for about C$1.5 billion.

Weak U.S. economic data underlined worries about dampening fuel demand and sent oil down $2.69 to settle at $124.08 a barrel. The retreat helped knock 3.1 percent off Canadian Natural Resources CNQ.TO.

Sun Life Financial SLF.TO was one of the biggest drags by weight, falling 6.1 percent after reporting its profit took a hit from weak results at its U.S. insurance and asset-management businesses.

The S&P/TSX composite index .GSPTSE closed down 90.30 points, or 0.66 percent, at 13,592.91, but just three of its 10 main sectors were on the downside, with the bulk of the losses coming from the energy and materials sectors.

The two groups were down 2.5 percent and 1.7 percent, respectively. In the oil patch, Suncor Energy SU.TO was down C$2.76, or 4.7 percent, at C$55.66, and Canadian Natural Resources fell C$2.57 to C$80.01.

A round of quarterly results showed that gold producers were hampered by surging production costs, despite a sharp increase in gold prices.

Goldcorp posted a surprise loss amid steep cost inflation and said it would by Gold Eagle to pick up the Bruce Channel gold discovery. Gold Eagle soared C$1.71, or 16.2 percent, to C$12.28, while Goldcorp was down C$1.70 at C$38.15.

Centerra Gold CG.TO fell 36 Canadian cents, or 6.5 percent, to C$5.20 after it said its profit tripled, but it suspended arbitration proceedings while it tries to arrive at a deal with the Kyrgyz government over sharing income from its Kumtor mine.

Sun Life slipped C$2.57 to C$39.80 after reporting its profit slid 12 percent as U.S. business operations were tripped up by a range of factors, from a decline in U.S. equity markets to credit-related losses.

However, the financial sector overall was up 0.2 percent, with Canadian Imperial Bank of Commerce CM.TO up 74 Canadian cents, or 1.2 percent, at C$61.98.

Also on the upside, Rothmans Inc ROC.TO gained C$3.53, or 13.5 percent, to C$29.70 after Philip Morris International PM.N said it would buy Canada’s No. 2 cigarette maker for about C$2 billion. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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