UPDATE 2-Toronto stocks battered by credit woes, resources

Thu Mar 6, 2008 1:56pm EST
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(Updates stock movement, adds details, quotes)

By Leah Schnurr

TORONTO, March 6 (Reuters) - The Toronto Stock Exchange's main index slid further on Thursday afternoon, dropping 200 points on worries over problems in the credit market and retreating commodity prices.

Weak U.S. data also pressured the benchmark, stoking concern over the state of the economy south of the border. Home foreclosures hit a record in the fourth quarter, while a report from the Labor Department said the number of people staying on jobless benefits is steady at the highest level in nearly 2-1/2 years.

The numbers helped worsen the sour mood in the market's financial sector, which fell 2.5 percent, with Canadian Imperial Bank of Commerce down C$1.83, or 2.8 percent, at C$62.52. Bank of Montreal BMO.TO skidded C$2.27, or 5 percent, to C$42.75, extending its recent decline.

The financial sector has fallen more than 8 percent over the past six days as banks have been beaten down by disappointing quarterly results, the ongoing asset-backed commercial paper problem and persistent fears of more writedowns.

"Even though the Canadians are arguably somewhat cleaner than the (U.S. financials), everyone's wondering how clean they are," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd., in Calgary, Alberta. "It's still that ongoing fear and I think as long as that's going on, the financials are going to be under pressure."

The S&P/TSX composite index .GSPTSE was down 200.66 points, or 1.48 percent, at 13,402.66 with all but one of its 10 main sectors in negative territory.

Resource shares also tumbled, hurt by profit-taking after Wednesday's gains, as well as a retreat in commodity prices from earlier highs.   Continued...