UPDATE 2-Toronto stocks dive on bleak bank news

Tue Jan 15, 2008 12:31pm EST
 
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By Scott Anderson

TORONTO Jan 15 (Reuters) - Toronto's main stock market index dived to its lowest level in more than three weeks on Tuesday amid worries over North American financial shares and falling commodity prices.

By noon, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 339.96 points, or 2.5 percent, at 13,358.32.

All 10 of the TSX index's main groups were lower led by a 3.3 percent fall in the influential energy group and a 2.2 percent dip in the heavily weighted financial group. The resource-heavy materials group was down 3.6 percent.

These three groups account for more than three-quarters of the overall market.

Investors bailed out of banking shares amid more bad news on both sides of the border.

Canadian Imperial Bank of Commerce (CM.TO: Quote) said on Monday it would take almost $2.5 billion in pretax writedowns related to the U.S. subprime mortgage crisis, and raise about C$2.75 billion ($2.70 billion) in stock sales to rebuild its balance sheet.

CIBC, Canada's fifth-largest bank, also said it will take a $2 billion pretax writedown in its financial first quarter related to the subprime mortgage hedge protection it bought from ACA Financial Guaranty Corp.   Continued...