TORONTO (Reuters) - The Toronto Stock Exchange’s main index just managed to end on the plus side on Friday, following a sharp three-day losing streak, as gains by resource and consumer issues offset worries over the outlook for the global economy.
Early on, the index had continued its week-long dive, giving up more than 2 percent after a U.S. labor market report fueled worries over the health of the economy of Canada’s largest trading partner, with data showing the U.S. unemployment rate soared last month.
But the materials and consumer sectors bounced back in the late afternoon, as bargain-hunters emerged, while a drop in oil prices eased worries over consumer spending.
Fertilizer firm Potash Corp of Saskatchewan was the biggest gainer by weight, rising 7.5 percent to C$172.35, while among consumer stocks, grocer Metro Inc was up 7.5 percent at C$28.55.
“After several days of declines, particularly in the materials and energy sector, what we are seeing is people deciding that that was a bit overdone and reassessing how much the stocks had sold off,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.
“I think, however, the trend’s likely to continue to be lower just because there continue to be worries about how much global growth is falling. But obviously, for the second half of today, people have decided that this week’s selloff was a bit overdone.”
The S&P/TSX composite index closed up 2.28 points, or 0.02 percent, at 12,816.42 with four of its 10 main sectors on the upside. The benchmark has shed nearly 7 percent over the holiday-shortened four-day week in a broad retreat prompted by worries over slowing global growth and the impact that will have on the demand for commodities.
The TSX has fallen to its lowest levels in more than five months in its worst weekly showing since January. The benchmark is down more than 15 percent from the life high, putting it closer to official bear market territory, generally defined as a 20 percent decline from the peak.
The heavyweight energy and materials sectors ended up 0.4 percent and 1.8 percent, respectively. Among gainers, Canadian Natural Resources rose 3.1 percent to C$83.33, and Teck Cominco climbed 3.2 percent to C$39.79.
The sectors had earlier been taken lower by weak oil and industrial metal prices before the downtrodden stocks attracted some investors back into the market.
But the $1.66 drop in oil to $106.23 a barrel buoyed consumer stocks that have been hurt by fears of decreasing spending. The consumer staples group added 1.1 percent.
“We did come back substantially from where we were down this morning, but still it wasn’t a really positive day,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.
“But still we had three really bad days preceding today, so I wouldn’t say this was really much of a turnaround in sentiment.”
Market volume was a hefty 425 million shares worth C$7.7 billion. Decliners outpaced advancers 916 to 616. The blue chip S&P/TSX 60 index closed up 1.22 point, or 0.16 percent, at 765.50.
In New York, the broader market also made modest gains, as a rally in financials helped reverse an earlier loss following the U.S. labor report. The Dow Jones industrial average closed up 32.73 points, or 0.29 percent, at 11,220.96, while the Nasdaq composite index edged down 3.16 points, or 0.14 percent, at 2,255.88.