By Natalie Armstrong
Reuters
Thursday, July 20, 2006

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TORONTO (Reuters) - The Toronto Stock Exchange's main index dropped more than 150 points on Thursday, completely erasing the previous day's gains, as gold and base-metal mining issues fell along with underlying commodity prices.

Adrian Mastracci, investment counsel at Vancouver’s
‘fee-only’ KCM Wealth Management, says, “The markets look a little tired right now.”

Toronto's key S&P/TSX composite index closed 154.08 points, or 1.3 percent, lower at 11,465.50. The index finished almost 150 points higher on Wednesday.

"We're seeing a disproportionate reaction to some weakness in gold and oil prices," said Elvis Picardo, chief market strategist at Global Securities Corp., in Vancouver. "That's largely because we had a nice advance yesterday."

"The fortunes of the TSX are being dictated by the energy and commodity groups," Picardo said.

Gold mining shares dropped 4 percent as August delivery gold in New York sank $10.30 to $632.50 an ounce on profit-taking. Barrick Gold dropped C$1.49, or 4.4 percent, to C$32.50, and Goldcorp fell C$1.53, or 4.7 percent, to C$31.27.

Base metals miners slid 1.6 percent on a widespread drop in prices. Teck Cominco Ltd. fell C$2.73, or 3.9 percent, to C$67.95. But shares of nickel giant Inco Ltd. gained C$1.46, or 1.8 percent, to C$80.75 on speculation that a higher takeover bid would emerge for the company.

The energy subgroup, which makes up about a third of the index, fell 1.6 percent even though crude prices rose. U.S. August crude was up 42 cents at $73.08 a barrel.

Shares of Talisman Energy were down 47 Canadian cents, or 2.6 percent, at C$17.73. Suncor Energy Inc. dropped C$1.24, or 1.4 percent, to C$88.96.

"The markets look a little tired right now," said Adrian Mastracci, investment counsel and president at KCM Wealth Management Inc. in Vancouver.

"I sense a mood shift to the sidelines. People want to go positive but they're just holding back because every day we see a new thing. They see some of the worries coming up again."

"We're going to see a lot more of this from the year-forward and to expect a good day one day, and a not-so-good day the next."

Market volume was 236.6 million shares worth C$5.6 billion. Decliners outpaced advancers 846 to 601. The blue chip S&P/TSX 60 index closed 9.27 points lower, or 1.4 percent, at 649.39.

On Wall Street, stocks fell on Thursday, dragged down by the technology sector and news of a disappointing outlook by Intel Corp.

The Dow Jones industrial average fell 83.32 points, or 0.76 percent, to close at 10,928.10. The Nasdaq market lost 41.29 points, or 1.98 percent, to close at 2,039.42. The S&P 500 slid 10.68 points, or 0.85 percent, to 1,249.14.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.