CANADA STOCKS-TSX drops nearly 4 pct, then recovers most losses
* Euro zone debt fears help trigger heavy selling
* TSX drops 452 points to 10-week low
* Oil, financials lead index lower (Updates to midafternoon, adds quotes)
By Jennifer Kwan
TORONTO, May 6 (Reuters) - Toronto's main stock index sank nearly 4 percent on Thursday to a touch 10-week week low as fears that the Greek debt crisis may threaten economic recovery sent North American stocks reeling.
U.S. stocks fell sharply in afternoon trade, with all three indexes briefly down 6 percent or more. The Nasdaq was down more than 9 percent earlier, as worries about Greece's debt issues mounted. [.N] [MKTS/GLOB]
"The sky is falling," said Conor Bill, managing director at Mt. Auburn Capital.
"We had a couple days of setbacks and people are looking at what's going on and the money is voting with its feet and saying that it is not comfortable with the run that we have had in the market."
Toronto's energy sector tumbled 2.5 percent as U.S. crude oil fell below $77 a barrel as concerns that the Greek debt crisis could engulf other euro zone economies fueled worries about demand for oil. [O/R]
EnCana Corp (ECA.TO: Quote) fell 2.4 percent to C$31.64 and Suncor Energy (SU.TO: Quote) slid 1.7 percent to C$31.95. Canadian Natural Resources CNQ.TO fell 2.5 percent to C$72.02.
Financials were down by 2 percent, with Royal Bank of Canada RY.TO down 3.4 percent t C$59.13.
Bruce Latimer, trader at Dundee Securities, said there was speculation the market sell-off was due in part to computer glitches.
"I've been in this business over 20 years. I've never seen it happen like that before. Every trading desk in the street is just buzzing right now," said Latimer.
"We're trying to find that out ourselves. We're not sure what happened. But some stocks, whether it was a futures program, an error, or something. This market just got hammered for about a two minute period, more so the U.S. than Canada."
At 3:11 p.m. (1911 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE stabilized, but was still down 94.67 points, or 0.8 percent, at 11,780.46.
Amid the selloff, it fell 452 points, or 3.8 percent, to a low of 11,422,73, its weakest level since Feb. 25.
By late afternoon, half of the index's 10 main groups were lower, reflecting lingering caution about the possibility that Greece's debt crisis could spread to other euro zone countries and derail economic recovery.
World shares tumbled and the euro extended its slump on Thursday on fears that Greece's debt crisis could sweep other euro zone states. [MKTS/GLOB] [FRX/] ($1=$1.06 Canadian) (Additional reporting by Scott Anderson; Editing by Jeffrey Hodgson)
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