CANADA STOCKS-TSX drops nearly 4 pct, then recovers most losses

Thu May 6, 2010 3:37pm EDT
 
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 * 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 fell 2.4 percent to C$31.64 and Suncor
Energy SU.TO 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)