CORRECTED - UPDATE 1-Toronto stocks fall on commodities, Cardiome hit

Mon Aug 11, 2008 12:20pm EDT
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(Corrects third bullet to show Cardiome shares fell 27.6 percent, not 9 percent) (Adds details)

*TSX index sinks as materials, energy sectors fall

*Oil drops to $114 a barrel; gold down at $840 an ounce

*Cardiome shares fall 27.6 percent after FDA letter

TORONTO, Aug 11 (Reuters) - Toronto Stock Exchange's main index was sharply lower late on Monday morning, weighed down by lower commodity prices, while Cardiome Pharma Corp COM.TO was hit by FDA queries regarding its Kynapid heart treatment.

Leading the way down was the resource-laden materials sector, which sank 4.5 percent, falling along with a slump in metals prices. Yamana Gold (YRI.TO: Quote) fell 68 Canadian cents, or 6 percent, to C$10.41.

Gold was sliding due to a rally in the U.S. dollar, said Andrew Martyn, portfolio manager at Davis-Rea.

"People are trying to get their head around what to do, essentially, with the U.S. dollar," Martyn said. "Is this just a one-time blip and we're going to head back in the other direction, or is this a continuous trend?"

The S&P/TSX composite index .GSPTSE was down 137.39 points, or 1.03 percent, at 13,204.35, with six of its 10 main groups lower.   Continued...