Toronto stocks dip on profit-taking, election uncertainty

Composite index drops 56 points Investors sit tight amid talk of vote

Toronto stocks closed lower yesterday in a broad- based decline as investors pocketed gains from a recent run- up, while uncertainty over the timing of a federal election weighed on the market. The Toronto Stock Exchange’s key S& P/ TSX composite index lost 55.82 points, or 0.52 per cent, to 10,628.90. Declining stocks outnumbered advancers by a ratio of 5 to 3, with about 233 million shares worth $ 4.1 billion changing hands. The TSX Venture Exchange lost 17.03 points to 1,996.75.

“ It’s really a mixed day across the board,” said Bruce Latimer, a trader at Dundee Securities in Toronto. “Markets have been strong during the last few days and I think there is a sort of profittaking out here.” The minority Liberal government could face a confidence vote from a newly united opposition next week that could trigger an election early next year.

“ When things like this happen, investors tend to sit on the sidelines until the situation clears up a little bit,” said Elvis Picardo, chief market strategist at Global Securities Corp. “ But the few declines of the TSX have been modest, and there is no sense of panic.”

All but one of the TSX’s 10 main groups retreated, with telecom issues off 1.78 per cent, and the consumer discretionary group down 0.8 per cent.

Telus was the biggest drag on the S&P/TSX, falling $1.38 to $ 46.99. Margins in the country’s second-largest phone company’s wireless business may ‘‘ flatten” in 2006- 2007, Merrill analyst Glen Campbell wrote in a note to clients. He cut Telus to “ neutral” from “ buy.”

Rogers Communications Inc., the country’s biggest mobilephone company, dropped $ 1.44 to $ 45.40. FMF Capital Group Ltd. plunged $ 4.72, or 77 per cent, to $ 1.43. The provider of residential mortgages was cut to “ underperform” from “ outperform” by BMO Nesbitt Burns. The materials group fell 0.74 per cent, as gold- mining issues fell for a second straight session as spot gold eased 10 cents to $ 468.10 ( U. S.) in New York.

Kinross Gold lost 16 cents ( Canadian), or 1.95 per cent, to $ 8.04, while Barrick Gold fell 45 cents, or 1.47 per cent, to $ 30.20 and Placer Dome dropped 29 cents, or 1.19 per cent, to $ 24.05. A drop in oil prices to the lowest in almost four months weighed on shares of energy producers. Petro-Canada, the country’s Number 3 oil company, fell 73 cents to $ 41.03. Enbridge Inc., owner of the largest crude- oil pipeline to the U. S., retreated 24 cents to $ 35.76. Crude oil for December delivery fell 71 cents ( U. S.), or 1.2 per cent, to $ 56.98 a barrel in New York, the lowest close since July 20, on signs that U. S. stockpiles rose last week as platforms and refineries recovered from hurricane damage. The utilities group was the only sector gaining ground, closing up 0.37 per cent. The blue chip S& P/ TSX 60 index ended down 2.92 points, or 0.48 per cent, at 600.31.

In the United States, stocks slipped after a sales warning from discount chain Target Corp. dimmed hopes for a strong holiday sales season, pushing the retail sector lower. The Dow Jones industrial average was down 10.73 points, or 0.10 per cent, to end at 10,686.44. The Nasdaq composite index was down 14.21 points, or 0.65 per cent, at 2,186.74.