August 1, 2008 / 6:58 PM / 9 years ago

UPDATE 2-Toronto stocks tumble as materials, techs weigh

(Updates to midafternoon)

* TSX tumbles as materials hit by metal prices

* Nortel falls as quarterly loss triples

* Worries over U.S. economy weigh after jobs data

TORONTO, Aug 1 (Reuters) - The Toronto Stock Exchange’s main index extended losses in a broad decline on Friday afternoon, knocked down by materials shares that followed metals prices lower.

Copper and other metal prices fell following data that stoked worries over the U.S. economy, while miners and gold producers sent Bay Street’s materials sector lower. Inmet Mining IMN.TO fell 5.3 percent.

The fresh worries over the outlook for the world’s largest economy also weighed after a government report showed employers cut jobs for the seventh month in a row in July and the U.S. unemployment rate jumped to its highest level in four years.

“Employment is typically a lagging indicator, so it will likely continue to deteriorate for a while, and I think the current numbers pretty much reflect that,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.

“The rate of unemployment is likely to edge somewhat higher here and that has an effect on market sentiment, no question.”

The S&P/TSX composite index .GSPTSE was down 165.71 points, or 1.22 percent, at 13,427.20, with all but three of its 10 main sectors lower.

Nortel Networks NT.TO stumbled C$1.28, or 16.3 percent, to C$6.57, dragging the tech sector down with it after the company said its quarterly loss tripled and warned that a tough U.S. market is hampering wireless spending by telecom firms.

Tech shares fell 4.8 percent, while elsewhere in the sector, heavyweight Research In Motion RIM.TO was down C$2.54, or 2 percent, at C$123.30.

The materials group was down 2.5 percent, with Inmet slipping C$3.43 to C$61.50, while fertilizer company Potash Corp of Saskatchewan (POT.TO) lost C$5.98, or 2.8 percent, to C$204.39.

The financial sector also skidded, giving up 1.6 percent, with Bank of Nova (BNS.TO) off 70 Canadian cents, or 1.4 percent, to C$49.28. Sun Life Financial (SLF.TO) extended declines from the previous session to fall C$1.59, or 4 percent, to C$38.21 the day after its quarterly profit came in below expectations. ($1=$1.03 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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