Subprime jitters drag Toronto stocks lower
By Leah Schnurr
TORONTO (Reuters) - The Toronto Stock Exchange's main index ended lower on Tuesday after it reversed direction in the afternoon as fears of more fallout from the battered U.S. subprime mortgage market undercut gains by gold-mining issues.
After jumping more than 100 points earlier in the day, the index slumped for the third session in a row amid persistent worries over the health of the U.S. economy.
Jitters over the prospect of more bad news out of the subprime mortgage market weighed on the index even after U.S. mortgage lender Countrywide Financial Corp CFC.N denied market rumors that it was facing bankruptcy.
In Toronto, the financials sector was down 1 percent. Canadian Imperial Bank of Commerce (CM.TO: Quote), which has the largest subprime exposure of any Canadian bank, fell C$2.06, or 3 percent, to C$66.96, and Bank of Montreal (BMO.TO: Quote) dropped 60 Canadian cents, or 1.1 percent, to C$55.55.
"We keep on getting more and more surprises from the American financial system," said Sal Masionis, a stockbroker at Brant Securities.
"The whole financials situation is pretty scary; it's a big unknown," Masionis added.
The S&P/TSX composite index .GSPTSE closed down 77.12 points, or 0.57 percent, at 13,541.75 with all but one of the 10 main groups in negative territory. The index has declined 3 percent over three days.
"Generally, it's a little bit more of a speculative market, we're still trying to work through some of the challenges on the U.S. economy and the subprime business," said Brian Pow, vice-president, research and equity analyst at Acumen Capital Partners in Calgary. Continued...