UPDATE 2-Toronto stocks hit hard by GE results

Fri Apr 11, 2008 11:19am EDT
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(Adds details and analyst comments)

TORONTO, April 11 (Reuters) - Toronto's main stock market index dropped sharply on Friday morning as disappointing results from U.S. bellwether General Electric GE.N stoked worries that the U.S. economic slowdown is far from over.

The Toronto Stock Exchange's key S&P/TSX composite index .GSPTSE was down 166.37 points, or 1.2 percent, at 13,743.21.

All 10 of the TSX index's main groups were lower with the resource-laden materials group down 1.3 percent and the heavily weighted financial group off 1.5 percent.

The market pushed the panic button after GE reported a disappointing first-quarter profit and lowered its earnings forecast for the year, stirring recession fears, as a slowdown in the U.S. economy and the credit crisis hit the company's financial, industrial and health-care units.

"Yes it is a very major U.S. corporation and maybe people are trying to read into it in terms of potential incremental fallout and negativity," said Irwin Michael, a portfolio manager at ABC Funds.

The Toronto market's financial institutions the brunt of the blow.

Canadian insurer Sun Life Financial SLF.TO dropped C$1.50 to C$46.0.0 and Manulife Financial MFC.TO was off C$1.09 at C$38.11.

Bank of Nova Scotia BNS.TO was off 83 Canadian cents at C$45.90, and Royal Bank of Canada RY.TO, the country's biggest bank, was down 68 Canadian cents at C$46.60.   Continued...