TORONTO (Reuters) - The Toronto Stock Exchange's main index finished slightly higher yesterday as a rise in resource shares offset nagging fears of more fallout from the credit crunch.

In choppy action, the materials sector was lifted two percent by gold producers, which rose along with bullion prices and helped to put a floor under the benchmark index.

Gold climbed to end just under $800 an ounce while the US dollar weakened. Traders said yesterday's action could be the beginning of a bounce back from recent declines for gold prices. Goldcorp was up 3.8 percent at C$32.35, while Barrick Gold added 3.3 percent to C$35.06.

The S&P/TSX composite index closed up 22.67 points, or 0.17 percent, at 13,119.37 after climbing by more than one percent earlier in the day. Of its 10 main sectors, half were higher.

The financial-services sector fell one percent, tripped up by sliding bank shares in the US amid anxiety over the possibility of more losses stemming from the US mortgage crisis.

Canadian Imperial Bank of Commerce slid 1.6 percent to C$60.25, and National Bank of Canada lost 2.2 percent to C$48.87.

Worries were stoked by a Barron's report that suggested the US. Treasury may recapitalise mortgage finance giants Fannie Mae and Freddie Mac. The Treasury Department said it had no plans to backstop either of the companies.

Shares of Corel Corp. bounced higher after falling earlier in the day after the software developer said its majority shareholder had withdrawn its offer to buy out the rest of the company. Corel rose 4.5 percent to C$10.04.