UPDATE 1-Toronto stocks drop on credit woes, profit-taking

Thu Mar 6, 2008 11:06am EST
 
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(Updates stock movement, adds details, quotes)

TORONTO, March 6 (Reuters) - The Toronto Stock Exchange's main index got off to a weak start on Thursday, tumbling more than 100 points on persistent concerns over credit market problems, while profit-taking hit resource shares.

The energy and materials sectors were down 0.7 percent and 0.8 percent respectively as investors locked in profits and commodity prices eased off highs reached earlier in the day.

Barrick Gold (ABX.TO: Quote) dipped C$1.22, or 2.3 percent, to C$50.93, while the gold producers subindex fell 1.2 percent. Spot gold fell back after a surging to a record above $991 an ounce

The price of oil also retreated after nearing $106 a barrel. Canadian Oil Sands Trust COS_u.TO gave up C$1.23, or 2.7 percent, to C$44.25, and Canadian Natural Resources (CNQ.TO: Quote) slipped C$1.05, or 1.4 percent, to C$75.40.

The financial sector slid 1.9 percent, hurt by continuing worries over the impact of troubles in the credit market. Bank of Montreal (BMO.TO: Quote) was down C$1.74, or 3.9 percent, at C$43.28, falling for the seventh day in a row. Also in the sector, Canadian Imperial Bank of Commerce (CM.TO: Quote) lost C$1.68, or 2.6 percent, to C$62.67.

"We continue to struggle with the resolution of issues in the financial sector of the economy right now - the subprime (problem) just doesn't go away, the mortgages, all this debt-related credit worry - just doesn't seem to want to dissipate and that's disturbing," said Rick Hutcheon, president and chief operating officer at RKH Investments.

The S&P/TSX composite index .GSPTSE was down 121.59 points, or 0.89 percent, at 13,481.73 with all but two of its 10 main groups in the negative.

The Toronto benchmark was also pressured by data that showed U.S. home foreclosures and the rate of homes entering the process rose to record highs in the fourth quarter as the troubles of the U.S. housing market continued to mount.   Continued...