CANADA STOCKS-TSX dives to near year low on oil, S&P downgrade

Mon Aug 8, 2011 11:29am EDT
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 * TSX tumbles 370.94 points, or 3.05 percent, to 11,791.23
 * Hits lowest since Aug. 27, 2010
 * Cut to U.S. AAA rating shakes investor confidence
 * All 10 sectors lower, led by oil and gas
 (Adds analyst comment, details, updates prices)
 By Ka Yan Ng
 TORONTO, Aug 8 (Reuters) - Toronto's main stock market
index sank more than 3 percent to its lowest point in nearly a
year on Monday as a downgrade of the U.S. credit rating shook
investor confidence globally and drove commodity prices sharply
 The move on the resource-heavy index tracked world stocks,
which tumbled on deep-rooted jitters about Standard & Poor's
cut to the top-tier AAA credit rating of the United States.
 "That's really what has energized this move on the
downside. We've sauntered around all year basically on the
weaker side, and this has only emphasized that," said Fred
Ketchen, director of equity trading at ScotiaMcLeod.
 "And in fact, it has put the downside a whole lot more in
 At 11 a.m. (1500 GMT), the Toronto Stock Exchange's S&P/TSX
composite index .GSPTSE was down 370.94 points, or 3.05
percent, to 11,791.23. All 10 main sectors were on the decline,
with six of them down more than 3 percent.
 The index tumbled in early dealings to 11,716.40, its
lowest since Aug. 27, 2010. The index has ended lower in seven
of the last nine sessions, and has lost almost 10 percent in
that time frame.
 The weakness was sharpest in the oil and gas sector, which
was down 5.46 percent and followed the price of oil lower.
Crude dropped close to 4 percent and was under $84 a barrel as
concern over economic growth spread. [O/R]
 Top decliners were Suncor Energy SU.TO, down 5.16 percent
at C$30.67, while Canadian Natural Resources CNQ.TO was off
4.3 percent at C$33.74.
 Economically-sensitive financial stocks, down 3.1 percent,
were also steep decliners, with Toronto-Dominion Bank TD.TO
down 3.78 percent at C$71.89, and Royal Bank of Canada RY.TO
shedding 3.3 percent to C$48.40.
 Shares of North American base metal miners tumbled, along
with the price of copper, zinc, and nickel, First Quantum
FM.TO fell 7.8 percent to C$107, while Teck Resources
TCKb.TO declined 7.35 percent to C$38.56. [ID:nN1E7770EY]
 But gold-miners were seen as a relative safe-haven
investment, with the price of bullion vaulting to a record over
$1,715 an ounce. Goldcorp G.TO was up 3.4 percent at C$46.90,
topping the minority of advancers that were mostly gold miners.
Barrick Gold ABX.TO gained 2.45 percent to C$45.99. [GOL/]
 All told, materials, home to gold-mining stocks, were down
1.06 percent with the index's gold subgroup helping to cushion
losses, up 2.33 percent.   
 The 11,750 level for the main index was seen as a key
level, with analysts warning a convincing move through that
mark might trigger a further slide.
 "We've stabilized around the 11,750 psychological barrier,
so we'll be looking today to see if the market closes above
that mark," said Fergal Smith, managing market strategist at
Action Economics.
 (Additional reporting by Trish Nixon)