UPDATE 2-Toronto stocks dip as banks offset resources

Mon Jul 14, 2008 1:05pm EDT
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(Updates to midday)

* TSX retreats as financials weigh

* Banks hurt by jitters over credit crunch

* Duvernay jumps on bid from Royal Dutch Shell

TORONTO, July 14 (Reuters) - The Toronto Stock Exchange's main index retreated into negative territory on Monday, dragged down by weak financials amid anxiety over further fallout from the credit crisis.

The renewed worries rattled markets as initial optimism over a proposed U.S. government rescue plan for mortgage finance giants Fannie Mae FNM.N and Freddie Mac FRE.N evaporated quickly on Monday morning.

Bay Street's financials took their cue from south of the border, sliding 2 percent. All the major Canadian banks were down with Toronto-Dominion Bank TD.TO off C$2.05, or 3.5 percent, at C$56.67, and Canadian Imperial Bank of Commerce CM.TO down C$1.51, or 2.9 percent, to C$50.70.

The S&P/TSX composite index .GSPTSE was down 14.39 points, or 0.1 percent, at 13,694.71 shortly after midday, with seven of its 10 main sectors lower.

On the upside, Duvernay Oil DDV.TO was the biggest gainer by weight after Royal Dutch Shell RDSa.L offered C$5.9 billion ($5.9 billion) for the Calgary-based company. Duvernay's shares shot up C$23.62, or 40.4 percent, to C$82.06.   Continued...