By Natalie Armstrong
Reuters
Thursday, August 3, 2006

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TORONTO (Reuters) - The Toronto Stock Exchange's main index fell on Thursday, as energy and gold issues dropped on lower commodity prices.

Adrian Mastracci, investment counsel at Vancouver’s ‘fee-only’ KCM Wealth Management, says, "After seven days of gains, which everybody loves of course, I think as investors we have to expect a little bit of a pause to catch our breath.”

The S&P/TSX composite index closed down 33.20 points, or 0.28 percent, at 11,936.66. The index had gained ground in seven of the past eight sessions.

"After seven days of gains, which everybody loves of course, I think as investors we have to expect a little bit of a pause to catch our breath," said Adrian Mastracci, investment counsel and president of KCM Wealth Management in Vancouver.

"Some of the individual stocks are probably getting a little shaving because of the earnings and the guidance news that they're giving, and investors are just a little bit on the fearful side. And rightly so because there are some things that may cause some concern," Mastracci added.

Overall, half the TSX index's 10 main groups ended lower.

Energy shares, which make up about a third of the main index, dropped 1.1 percent as U.S. September crude futures settled down 35 cents at $75.46 a barrel as Tropical Storm Chris weakened and was no longer expected to become a threat to oil and gas production in the Gulf of Mexico.

Suncor Energy fell 31 Canadian cents, or 0.3 percent, to close at C$93.15, a day after the company reported a sharply higher second-quarter profit on higher oil sands production and a lower income tax rate.

Imperial Oil Ltd.'s 55 percent rise in earnings on Thursday failed to lift the energy sector. Imperial advanced 14 Canadian cents, or 0.3 percent, to close at C$42.60.

Golds dropped 1.9 percent as profit-taking dragged New York gold futures down to $646.50 an ounce from two-week highs.

Strong earnings results from Barrick Gold Corp. didn't help, with the world's biggest producer off 28 Canadian cents, or 0.8 percent, at C$35.93. Goldcorp fell 74 Canadian cents, or 2.1 percent, to finish at C$34.02.

The financial subgroup edged up 0.4 percent, with Royal Bank of Canada ahead 66 Canadian cents, or 1.4 percent, at C$46.51. Canadian Imperial Bank of Commerce was up 95 Canadian cents, or 1.2 percent, to close at C$79.28.

"The financials seem to be picking up the slack from the oils and the golds," said John Kinsey, a portfolio manager with Caldwell Securities Ltd.

"The financials are all up, except for Manulife which is strange because they had very good earnings, and they're marginally down."

Manulife reported a 14 percent profit on Thursday on strong product sales south of the border, investment gains and a lower Canadian tax rate but the shares ended down 48 Canadian cents, or 1.4 percent, at C$35.17.

The health-care sector fell 1.4 percent, led lower by Extendicare, which reported a second-quarter loss on restructuring charges. The nursing home operator was down C$1.72, or almost 7 percent, at C$22.93

Market volume was 241.4 million shares worth C$4.37 billion. Decliners outpaced advancers 855 to 589. The blue chip S&P/TSX 60 index closed 1.13 points lower, or 0.2 percent, at 674.77.

U.S. stocks ended higher, helped by Apple Computer Inc., which announced a deal with three major automakers to have its iPod music players linked to car stereos.

The Dow Jones industrial average gained 42.66 points, or 0.38 percent, to end at 11,242.59. The Nasdaq composite index was up 13.53 points, or 0.65 percent, to close at 2,092.34.

($1=$1.12 Canadian)

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