UPDATE 1-Toronto stocks turn negative on economic worries

Mon Feb 11, 2008 10:44am EST
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TORONTO Feb 11 (Reuters) - Toronto stocks turned weaker at midmorning on Monday as more worries about the health of the global economy and declining commodity prices overshadowed a report that Nortel Networks NT.TO will team up with Motorola Inc MOT.N in wireless networking.

By midmorning, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 26.50 points, or 0.2 percent, at 12,962.84.

Earlier in the session, the index had climbed as high as 13,069.39.

"We're trying to come to grips with the volatility that we've experienced over the last couple of weeks. We had the best week in years followed by the worst week in years," said Rick Hutcheon, president and chief investment officer at RKH Investments.

"We're still in this faithful no-man's land, where the market doesn't have a trend."

Investors keyed on developments at the Group of Seven meetings over the weekend, where leaders expressed concern that the troubled U.S. housing market had hurt the world economy.

Exacerbating the problem was insurer American International Group Inc (AIG.N: Quote), which received a rebuke from its auditors for how it valued some credit derivatives.

Seven of the TSX index's 10 main groups were lower, led down by a 0.7 percent drop in the heavily weighted financial index and a 0.7 percent drop in the resource-heavy materials group.   Continued...