UPDATE 5-Toronto stocks dive as commodities retreat

Thu Oct 2, 2008 5:15pm EDT
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* Toronto stocks give up close to 7 percent

* Potash, Agrium lead declines after downgrade

* Financial-market uncertainty continues to weigh (Adds details)

By Wojtek Dabrowski

TORONTO, Oct 2 (Reuters) - The Toronto Stock Exchange's main index fell nearly 7 percent on Thursday to its lowest level in more than two years, battered by concerns over the outlook for fertilizer producers and a drop in oil and gold prices.

The plunge in shares of big fertilizer producers Potash Corp of Saskatchewan POT.TO and Agrium Inc AGU.TO came amid worries that the U.S. credit crisis could hamper farmers' ability to get cash for next year's planting season. It marked the latest in a series of shock waves emanating from Wall Street's turmoil and the related slowdown in the global economy.

"It's really brutal out there," said Sal Masionis, a stockbroker at Brant Securities. "The most important thing is the tightness in the money market and the capital markets as a whole."

The S&P/TSX composite index .GSPTSE plunged 813.97 points, or 6.95 percent, to 10,900.54.

The S&P/TSX 60 index of Canadian blue chips shed 7.45 percent to end at 651.34.   Continued...