UPDATE 5-Toronto stocks drop as credit worries rise

Tue Dec 18, 2007 5:18pm EST
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 (Adds details, quotes)
 By Leah Schnurr
 TORONTO, Dec 18 (Reuters) - The Toronto Stock Exchange's
main index ended lower on Tuesday after a choppy session as
sliding financial shares, hit by renewed worries about the
credit crisis, prompted a broad-based decline.
  The index's financial sector fell 0.7 percent, with
Canadian Imperial Bank of Commerce (CM.TO: Quote) dropping C$1.85, or
2.5 percent, to C$72.29, and Royal Bank of Canada (RY.TO: Quote)
sliding 39 Canadian cents, or 0.8 percent, to C$50.71.
 The fall came after Goldman Sachs Group Inc (GS.N: Quote), the
biggest U.S. securities firm, said it was cautious about its
near-term outlook even though it reported earnings that topped
forecasts. This stirred fears of further fallout linked to the
U.S. subprime mortgage crisis and resulting credit squeeze.
 Adding to concerns over the financial sector, an investor
committee trying to create a fix for the asset-backed
commercial paper market missed last Friday's deadline to
announce details of its repair plan.
 Toronto-Dominion Bank (TD.TO: Quote) said on Monday that while it
was willing to consider steps to help repair the third-party
ABCP market, it didn't believe that it should shoulder a burden
it didn't create.
 "There continues to be lot of concern about the state of
financials and their exposure to this whole subprime mess in
the U.S.," said Elvis Picardo, investment strategist at
Northern Securities Inc., in Vancouver, British Columbia.
 "Going forward, we will continue to see a volatile
environment, where concerns resurface about the slowing of the
global economy, and that will obviously mean that commodities
groups will continue to be quite volatile in the near term,"
Picardo said.
 The benchmark S&P/TSX composite index .GSPTSE closed down
29.04 points, or 0.22 percent, at 13,358.07 with eight of the
TSX's 10 main groups in negative territory.
 It was the fourth day in a row the index has declined and
extends Monday's sharp 287-point drop.
 The index is down 2.4 percent so far for December, a month
that has been historically positive. Analysts said that this
could set the tone for the new year.
 "We're getting perilously late for a Santa rally to happen
this year," said Peter Chandler, senior vice-president at
Canaccord Capital in Waterloo, Ontario.
 The industrials sector fell 0.6 percent, while
Transcontinental Inc (TCLa.TO: Quote) TCLb.TO slid after reporting
lower fourth-quarter profit. The commercial printer ended down
65 Canadian cents, or 3.7 percent, at C$16.80.
 On the upside, the materials group managed a 0.3 percent
gain, despite worries that a economic slowdown could dampen
demand for resources.
 Kinross Gold (ABX.TO: Quote) rose 36 Canadian cents, or 2.2
percent, to C$16.54, and Barrick Gold (ABX.TO: Quote) gained 54
Canadian cents, or 1.4 percent, to C$38.21, helped by an
advance in gold prices.
 In other news, BioMS Medical Corp MS.TO jumped 37.8
percent, or C$1.02, to C$3.72 after it signed a global
licensing and development agreement with Eli Lilly (LLY.N: Quote) for
its multiple sclerosis compound.
 Market volume was 426 million shares worth C$7 billion.
Decliners outpaced advancers 975 to 682. The blue chip S&P/TSX
60 index  closed down 1.61 points, or 0.21 percent, at
 In New York, markets rallied as investors snapped up
technology shares and bargain-hunting helped offset a decline
in Goldman shares.
 The Dow Jones industrial average .DJI ended up 65.27
points, or 0.5 percent, at 13,232.47, and the Nasdaq Composite
Index .IXIC gained 21.57 points, or 0.84 percent, to
 ($1=$1.01 Canadian)
 (Editing by Peter Galloway)