By Jennifer Kwan
Reuters
Friday, February 9, 2007

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TORONTO (Reuters) - The Toronto Stock Exchange's main index ended sharply lower on Friday as investors shrugged off strong economic data and took profits in a broad retreat from record highs this week, led by the materials sector.

Adrian Mastracci, fee-only portfolio manager at
KCM Wealth Management in Vancouver, says, "Longer term, we might be looking at some sort of pullback. Today, it's a lot of taking some profits -- and taking a few profits off the table is a good idea."

The S&P/TSX composite index closed down 100.35 points, or 0.8 percent, at 13,083.95. The benchmark index was flat on the week, closing down 0.2 percent, after hitting a record close of 13,184.30 on Thursday.

Before Friday's selloff, the main TSX index had gained nearly 6 percent in the past month.

"Longer term, we might be looking at some sort of pullback," said Adrian Mastracci, investment counsel and president of KCM Wealth Management Inc. in Vancouver. "Today, it's a lot of taking some profits -- and taking a few profits off the table is a good idea."

All of the TSX index's 10 main groups were lower, with the resource-laden materials sector down 1 percent and the energy sector off 0.7 percent, despite firm underlying commodities.

Teck Cominco Ltd. fell C$1.18, or 1.4 percent, to C$82.50, while Barrick Gold Corp. shed 30 Canadian cents, or 0.8 percent, to C$36.07.

EnCana Corp. slid 77 Canadian cents, or 1.3 percent, to C$57.00.

Also weighing on the TSX was a 1.4 percent drop by the information technology sector, which has been hit by volatility this week, as investors dumped shares of Research In Motion Ltd. RIM slid C$6.70, or 4.1 percent, to C$157.20.

Shares of Loblaw Cos. Ltd. continued to suffer from a big writedown announced on Thursday, pulling the consumer staples group down 0.8 percent. Loblaw slid C$2.14, or 4.4 percent, to C$46.81.

On the economic front, Statistics Canada said on Friday the economy added 88,900 jobs, far greater than the increase of 10,000 analysts had predicted.

Analysts said the data would likely dash any hopes of interest rate cuts by the Bank of Canada, but the strong figures were not enough to prop up the market.

"The whole week was humming along very nicely, but again the index was looking tired," Steve Ibel, institutional equities trader at Beacon Securities in Halifax, Nova Scotia, said of the broad selloff.

On the earnings front, shares of Air Canada rose 58 Canadian cents, or 3 percent, to C$19.88, after it slashed its operating loss in the fourth quarter as more passengers paid higher prices for tickets and the airline cut unit costs.

Brookfield Asset Management Inc. fell C$1.59, or 2.8 percent, to C$54.85 after it reported a lower fourth-quarter profit and said it planned a three-for-two stock split.

Market volume was 408 million shares worth C$6.1 billion. Decliners outpaced advancers 881 to 721. The blue chip S&P/TSX 60 index closed 6.70 points lower, or 0.9 percent, at 748.59.

South of the border, the Dow Jones industrial average slid 56.80 points, or 0.5 percent, to end at 12,580.83, while the Nasdaq composite index fell 28.85 points, or 1.2 percent, to close at 2,459.82.

($1=$1.17 Canadian)

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