August 14, 2008 / 10:24 AM / 9 years ago

Weak resources pull Toronto stocks lower

TORONTO (Reuters) - The Toronto Stock Exchange’s main index closed slightly lower on Thursday as easing commodity prices weighed on resource shares, but provided a boost for the wider market.

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>

A drop to $115 a barrel for oil weighed on the heavyweight energy sector amid worries over the prospects for global demand growth. Among laggards in the group, Canadian Natural Resources CNQ.TO slid 2 percent.

The materials sector, home to resource shares, also fell, hurt by gold producers that dropped with bullion prices. Agnico-Eagle Resources AEM.TO was off 5.4 percent.

The lower commodity prices helped strengthen the broader market as they eased anxiety over the impact of soaring prices on the consumer and the economy. A rise in financial services helped put a floor under the index. Canadian Imperial Bank of Commerce CM.TO gained 1.3 percent.

“People viewed the commodity headwinds as just so severe that any time you get a pullback in the commodities, the market will try to make some headway,” said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd, in Calgary, Alberta.

The S&P/TSX composite index closed down 18.31 points, or 0.14 percent, at 13,358.91.

The energy and materials sectors were the only two groups in negative territory, losing 1.2 percent and 2.8 percent, respectively. In the oil patch, Canadian Natural fell C$1.72 to C$82.82, while Suncor Energy SU.TO lost 70 Canadian cents, or 1.2 percent, to C$56.00.

In the materials group, Agnico-Eagle fell C$3.06 to C$53.84, while Barrick Gold ABX.TO was down C$1.95, or 5.2 percent, at C$35.65.

U.S. economic data injected a sour tone as consumer prices jumped in July at the fastest annual pace in 17 years, spurring worries over pressure faced by consumers due to soaring energy and food costs.

On the upside, the large financial sector added 1.6 percent with CIBC up 80 Canadian cents at C$60.50, and Toronto-Dominion Bank TD.TO rising C$1.07, or 1.7 percent, to C$62.94.

“This market that we’re in, it was led down by the financials, so now we’re going to have to see it led back out of this morass by the financials as well,” said Kerkovius.

“I think we’re certainly in that trend now -- it’s starting to have positive tones under the market.”

Units of Sleep Country Canada Income Fund Z_u.TO shot up 36.3 percent after two private equity firms launched a C$299 million ($282 million) bid to take control of the country’s largest mattress retailer. Sleep Country finished up C$5.83 at C$21.88.

Market volume was 383 million shares worth C$5.9 billion. Decliners outpaced advancers 779 to 727. The blue chip S&P/TSX 60 index closed down 1.34 point, or 0.17 percent, at 798.45.

In New York, stocks were lifted by the decline in oil prices, while financials came back from a sharp two-session slump.

The Dow Jones industrial index closed up 82.97 points, or 0.72 percent, at 11,615.93, and the Nasdaq composite index rose 25.05 points, or 1.03 percent, to 2,453.67.

($1=$1.06 Canadian)

Reporting by Leah Schnurr; editing by Rob Wilson

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