CANADA STOCKS-TSX sheds 2.8 percent on weak corporate news

Thu Dec 11, 2008 5:23pm EST
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* Toronto index hands back all of Wednesday's gain

* All 10 TSX sectors close in negative territory

* Bleak corporate news sparks slide in key companies

By Frank Pingue

TORONTO, Dec 11 (Reuters) - Toronto's main stock index sank nearly 3 percent on Thursday as oil and gas company EnCana Corp (ECA.TO: Quote) led a broad-based skid as it cut its capital budget, while nagging economic concerns hit financial shares.

Other drags on the market were Gildan Activewear (GIL.TO: Quote) shares, which fell after it issued a disappointing outlook, and BCE Inc (BCE.TO: Quote), whose shares fell after a C$34.8 billion leveraged buyout for the telecommunications company collapsed.

Heavily weighted financial issues, which account for about a third of the main index, fell for a third straight session on worry that a bailout plan for the U.S. auto industry might not go ahead, while concerns about the economy persisted.

The market's skid knocked it back to its lowest closing level since Monday and erased all of the 236 points it gained on Wednesday, when energy shares led a rally.

"Whenever you have a market crash like you had through October and November it takes time for the damage to heal and so you get volatility and you get bouncing around as people are still very nervous," said Julie Brough, vice president at Morgan Meighen & Associates.   Continued...