CANADA STOCKS-TSX falls hard after four days of gains

Thu Aug 6, 2009 4:50pm EDT
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* TSX down 253.56 points, or 2.3 percent, at 10,793.37

* Manulife, the top heavyweight decliner, tumbles 14.8 pct

* Financials retreat 5.6 pct (Updates to official closing numbers, adds details, quotes)

By Jennifer Kwan

TORONTO, Aug 6 (Reuters) - Toronto's main stock index sank on Thursday after four days of gains, hurt by a dividend cut by Manulife Financial (MFC.TO: Quote) as the market digested an avalanche of corporate results.

Canadian insurers were the big net loss leaders and Manulife led the way lower, tumbling 14.8 percent to C$22.36. Canada's largest insurer reported a jump in quarterly profit, handily beating analysts' expectations, but it surprised the market by chopping its dividend in half.

"If all you owned was Manulife, your income has just been cut in half," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc.

"That certainly sends a signal to investors that it's not all rosy out there and nothing is guaranteed. The biggest question becomes, who else is going to do something like this."

While the second quarter showed Manulife, Sun Life Financial Inc (SLF.TO: Quote) and Great West Lifeco Inc (GWO.TO: Quote) had turned the corner after last year's stock market slump hit their huge investment portfolios, they indicated they still face difficulties, including low interest rates, which hurt returns on fixed-income investments, and the need to rebuild capital. [ID:nN06313250]   Continued...