UPDATE 3-Toronto index drops 6 pct as fertilizers dive
* Potash, Agrium tumble after Merrill Lynch downgrade
* Energy sector falls 8 percent as oil slides to $94
* U.S. Senate approval of bailout fails to lift mood
(Adds details, updates figures)
TORONTO, Oct 2 (Reuters) - The Toronto Stock Exchange's main index sank more than 6 percent on Thursday afternoon to its lowest in two years, dragged down by concern over the outlook for fertilizer producers and a drop in oil and gold prices.
Potash Corp of Saskatchewan POT.TO and Agrium Inc AGU.TO, which had helped power the market during the commodities boom, dropped more than 20 percent after Merrill Lynch downgraded the stocks because uncertainty over earnings for the sector. [ID:nN02254052].
The hefty materials group, which includes fertilizer companies, led the market down, tumbling 13 percent.
The energy sector slid 8 percent as oil retreated to $94 a barrel on persistent concerns over weakening demand in a cooling global economy [ID:nSP360782].
The U.S. Senate's passage of a revised, $700 billion financial rescue plan late Wednesday failed to dispel worries over how evaporating credit is affecting the wider economy. Continued...