UPDATE 1-Toronto stocks drop on banks, oils

Mon Jan 7, 2008 11:34am EST
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TORONTO Jan 7 (Reuters) - Toronto stocks were lower at midmorning on Monday, but up from a more than a 200-point fall earlier in the day as banking shares fell after market rumors of a writedown at another Canadian bank and energy shares declined after forecasts of a warmer-than-expected winter.

By midmorning, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 146.37 points, or 1.1 percent, at 13,632.21 after racing as high as 13,839.65 just after the open and then dropping as low as 13,570.22.

This follows a fall of 199 points on Friday.

"This is symptomatic of a trendless, directionless market," said Rick Hutcheon, president and chief operating officer at RKH Investments.

Overall, nine of the TSX index's 10 main groups were lower led down by a 1.9 percent drop in the materials group, a 0.9 percent fall among heavily weighted financial shares and a 1.4 percent drop among energy issues.

The energy and financial groups account for about 60 percent of the overall index.

Energy shares slipped as the price for U.S. crude oil dropped 1.4 percent to $96.55 a barrel on forecasts of a warmer than expected winter that could bite into consumption of heating fuels.

Canadian Natural Resources (CNQ.TO: Quote) was down C$1.46 at C$73.05, and EnCana Corp (ECA.TO: Quote) dropped C$1.09 to C$68.78.   Continued...