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: Quote) and Agrium Inc (AGU.TO: Quote), 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...