UPDATE 2-Resources, recession fears weigh on Toronto stocks

Tue Feb 5, 2008 12:10pm EST
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(Updates numbers, adds details, quotes)

TORONTO Feb 5 (Reuters) - The Toronto Stock Exchange's main index extended its slide on Tuesday, falling 200 points amid weak resource issues and new data that deepened fears of a U.S. recession.

In its biggest decline in two weeks, the benchmark index was hit by U.S. data from the Institute for Supply Management that underlined worries that the impact of the U.S. housing slump was infecting the larger economy.

The prospect of a U.S. recession put further downward pressure on crude prices and Toronto's energy sector, which led the decline, falling 1.8 percent.

"It's predominantly the ISM number, which I guess is kind of old news in a way. Given all the other news that's been coming, we knew we were heading toward some confirmatory numbers that showed a rapid slowing," said Paul Hand, managing director at RBC Capital Markets.

Still, "they're taking it pretty badly at the moment on both sides of the border," Hand said.

The S&P/TSX composite index .GSPTSE was down 202.16 points, or 1.52 percent, at 13,056.00 with all but two of its 10 main sectors lower.

In the energy group, Canadian Natural Resources CNQ.TO was down C$1.76, or 2.7 percent, at C$64.50, while Suncor Energy SU.TO lost C$2.67, or 2.8 percent, to C$93.31.

The price of gold was also hurt by the decline in U.S. stocks, which helped push the resource-laden materials sector down 1.5 percent. The subindex of gold producers was off 0.8 percent.   Continued...