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: Quote) 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: Quote) dropped C$1.50 to C$46.0.0 and Manulife Financial (MFC.TO: Quote) was off C$1.09 at C$38.11.

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