Toronto stocks sag as crude price falls to four-month low

Composite index drops 91 points U.S. markets climb after debt sale

Toronto stocks sagged more than 90 points yesterday, dragged down by a major retreat by energy issues and disappointing earnings results. The Toronto Stock Exchange’s key S& P/ TSX composite index finished down 91.28 points, or 0.86 per cent, at 10,565.26.

“ Once again, oil has been the dominant factor in moving the market,” said Elvis Picardo, chief market strategist at Global Securities Corp. in Vancouver.

Half the TSX’s 10 main groups fell, with energy issues leading the way. The energy group, which makes up around 25 per cent of the S& P/ TSX composite index, sagged 4.44 per cent.

Oil prices fell $ 1.13 ( U. S.) a barrel to a four- month low of $ 57.80 in New York as bulging U. S. crude stocks piled pressure on investors to sell.

“ When you have volatility in a group like this, it’s usually a pretty good indicator that the sentiment is turning,” Picardo said. “ Prior to the selloff in October, the group had gone very far in a very short period of time. I think investors are still undecided about what happens next year.” Nexen Inc. closed down $ 2.15 ( Canadian), or 4.21 per cent, at $48.97, while Suncor Energy lost $ 3.36, or 5.15 per cent, to $61.89, and Canadian Natural Resources fell almost 6 per cent, or $ 3.35, to $ 53.40. EnCana Corp. dropped $ 2.65, or 5.01 per cent, to $ 50.22, while Talisman Energy was down $ 2.34, or 4.37 per cent, at $ 51.26. Petro- Canada, the third- largest oil company in Canada, declined $ 1.94 to $ 41.01.

Oil prices have dropped more than $ 13 ( U. S.) from a late- August record above $70 on signs of weakening demand. Among other stocks, Grande Cache Coal Corp. plunged 93 cents ( Canadian), or 28 per cent, to $ 2.34. The coal producer said that its net loss during the fiscal second quarter widened to 26 cents a share from 6 cents. Linamar Corp. dropped $ 2.72, or 18 per cent, to $ 12.06, for the worst performance in the S& P/ TSX. The auto- parts maker said “ modest sales growth” and launch costs will result in “ flat earnings in 2006 vs. 2005.” On the positive side, the information technology sector rose 1.79 per cent, led by Research In Motion, which jumped $ 5.70, or 7.88 per cent, to $ 78.01. RBC Capital Markets analyst Mike Abramsky wrote in a note to clients the maker of the BlackBerry email pager, which is being sued by NTP Inc. over alleged patent infringement, may settle the case quickly.

Rentcash Inc. gained 59 cents, or 5.5 per cent, to $ 11.30. The Edmonton, Alta.-based loan company said that fiscal firstquarter profit rose to 23 cents a share from 8 cents.

Toronto market momentum was strongly negative as 872 issues declined and 564 advanced on a volume of 256 million shares worth $ 4.6 billion. The blue chip S& P/ TSX 60 index ended down 5.44 points, or 0.9 per cent, at 595.86. On Wall Street, stocks closed higher after robust demand from overseas investors for U. S. government debt signalled confidence in the economy, while sliding crude prices soothed fears of high energy costs. The Dow Jones industrial average ended up 93.89 points, or 0.89 per cent, at 10,640.10, its highest close in nearly two months. The Nasdaq composite index was up 20.87 points, or 0.96 per cent, at 2,196.68.