UPDATE 2-Toronto stocks shed 2 pct in broad fall on lower oil

Mon Jul 7, 2008 1:47pm EDT
 
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(Updates to midday)

*TSX drops more than 2 percent in broad selloff

*Resource shares lead the way as oil prices fall

*Concerns emerge over upcoming corporate earnings

TORONTO, July 7 (Reuters) - The Toronto Stock Exchange's main index shed more than 2 percent on Monday, in a broad and swift decline sparked by resource shares that were hit by a sharp tumble in oil prices.

Sagging energy shares led the retreat, in tandem with a drop of more than 2 percent in crude oil prices to about $141 a barrel, as investors eyed Iran's long-running dispute with the West over its nuclear work amid signs the country might be more flexible in negotiations.

Canadian Natural Resources CNQ.TO was down C$4.15, or 4.3 percent, at C$91.66, and Canadian Oil Sands Trust COS_u.TO slid C$2.69, or 5.1 percent, to C$49.61. The two companies were among the biggest drags on the index, with the influential energy group down 3.7 percent.

The benchmark S&P/TSX composite index .GSPTSE fell 312.38 points, or 2.23 percent, at 13,698.01 at midday, with all its 10 main sectors in negative territory.

Lofty oil prices and the impact of higher energy costs on company profits and consumer spending also raised concerns about the prospect of a ream of weak results in the upcoming corporate earnings season.   Continued...