* TSX lower on gloomy outlook, weak commodity prices
* Nine of the TSX’s 10 main groups lower
* Financials slide 1.5 percent (Adds details)
TORONTO, Feb 2 (Reuters) - Toronto’s main stock index fell broadly on Monday morning, hurt by weaker banks and lower commodity prices, as concern mounted about the global economy and deteriorating corporate profits.
Financials dropped 1.5 percent, swept up in concerns about the recession, the ailing U.S. banking sector and news that ratings agency Moody’s had cut Britain’s Barclay’s Bank on expectations of “significant” further losses.
“It still looks like it’s in tough shape,” said Sal Masionis, a stockbroker at Brant Securities. “Until the banking system gets straightened out we’re in tough shape.”
All five of Canada’s biggest banks were lower, with Toronto-Dominion Bank (TD.TO) down 2.1 percent at C$38.97.
Energy company Canadian Natural Resources (CNQ.TO) lost 3.03 percent to C$42.56 as crude retreated. Oil fell below $41 a barrel as the deepening U.S. recession shrank demand in the world’s biggest and evidence mounted of a global downturn.
Gold slipped as short-term investors took profits after the precious metal hit three-month highs last week.
Both commodity retreats combined to push the materials and energy sectors lower, down 0.71 percent and 1.14 percent, respectively.
But there were modest advances by some top names within those two sectors, limiting the losses.
Petro-Canada PCA.TO was one of the key movers to the upside, rising 1.6 percent to C$27.01, as a report said the Ontario Teachers’ Pension Plan was raising its stake in the oil company. [ID:nBNG414059]
At 11 a.m. (1600 GMT), the S&P/TSX composite index .GSPTSE was down 80.44 points, or 0.93 percent, at 8,614.46.
Nine of the TSX’s 10 main groups were lower. The index at one point fell to 8,533.63, its lowest level since Jan. 23, but trimmed its losses as U.S. data showed a smaller than expected contraction in the manufacturing sector.
MDS Inc MDS.TO was the lone advancer in the healthcare group, though off early highs. The life sciences company, was up up 0.6 percent at C$9.66, after it named an independent committee to look at ways to boost shareholder value. [ID:nN02531978]
The resource-rich TSX index fell 3.25 percent in January after racing higher early in the month. The new month brings some optimism, but a slew of earnings reports due out in next few weeks may provide more bad news to add to the economic gloom.
Key companies due to report earnings this week include TransCanada Corp (TRP.TO) and Husky Energy HSE.TO.
Later this week, key employment reports are scheduled from both Canada and the United States, with both expected to show job losses for January and a higher unemployment rate. (Reporting by Ka Yan Ng; editing by Rob Wilson)