UPDATE 4-Recession woes knock 225 pts off Toronto stocks

Fri Apr 11, 2008 4:45pm EDT
 
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(Updates with official closing numbers, adds details)

TORONTO, April 11 (Reuters) - The Toronto Stock Exchange's main index shed more than 225 points on Friday, hit hard by deepening worries for a weak earnings season and another sign the United States may be sliding into a recession.

The sour tone was set early in the day by an unexpected drop in first-quarter profit by conglomerate General Electric (GE.N: Quote), seen as a bellwether for the U.S. economy.

The slump on Bay Street was exacerbated by sliding resource shares, which were hampered by soft commodity prices. Suncor Energy (SU.TO: Quote) fell C$3.02, or 2.8 percent, to C$106.82, while Barrick Gold (ABX.TO: Quote) was down C$1.24, or 2.8 percent, at C$43.76. The energy and materials sectors gave up 1.5 percent and 1.6 percent respectively.

Financials also lagged, losing 1.7 percent, with Bank of Nova Scotia (BNS.TO: Quote) down C$1.19, or 2.6 percent, at C$45.54. The Wall Street Journal reported on Thursday that Scotiabank had entered the bidding for a stake in troubled U.S. bank National City NCC.N.

Elsewhere in the sector, Royal Bank of Canada (RY.TO: Quote) fell 90 Canadian cents, or 1.9 percent, to C$46.38.

The S&P/TSX composite index .GSPTSE closed down 226.55 points, or 1.63 percent, at 13,683.03 with all 10 of its main sectors lower. It was the worst one-day decline in over three weeks.

The gloom set in early as GE, the second-largest U.S. company by market capitalization, reported a 6 percent drop in first-quarter profit, with earnings at its financial services arms off by about 20 percent. The weak results crushed investor sentiment and added to fears of a U.S. recession.

Research In Motion RIM.TO, the maker of the BlackBerry, was among the biggest drags by weight on the TSX as it slid C$4.61, or 3.7 percent, to C$118.76.

Shares of Shaw Communications (SJRb.TO: Quote), the country's No. 2 cable and satellite TV company, bucked the downward trend, climbing 84 Canadian cents, or 4.2 percent, at C$21.05. Shaw said its second-quarter profit more than tripled amid a tax recovery, solid subscriber gains and higher prices.

($1=$1.02 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)