UPDATE 2-Toronto stocks slip as financials drag

Thu Dec 20, 2007 1:14pm EST
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(Updates to afternoon)

TORONTO Dec 20 (Reuters) - The Toronto Stock Exchange's main index lost ground in early afternoon on Thursday, sliding slightly as declining financial issues weighed.

The banking sector was down 0.9 percent the day after Canadian Imperial Bank of Commerce (CM.TO: Quote) warned of the probability of a "large charge" in its first-quarter results on its exposure to the U.S. subprime market.

All of the major banks were in negative territory, including Toronto-Dominion Bank (TD.TO: Quote), which fell C$1.06, or 1.5 percent, to C$68.99. CIBC lost 77 Canadian cents, or 1.1 percent, to C$70.37.

The S&P/TSX composite index .GSPTSE was down 24.15 points, or 0.2 percent, at 13,365.67 in the early afternoon. Six of the TSX's 10 main groups were lower. The index has finished lower in four of the past five sessions.

The industrials sector shed 0.7 percent, while the utilities group gave up 0.8 percent.

Brian Pow, vice-president, research and equity analyst at Acumen Capital Partners, in Calgary said the index was also seeing tax-loss selling, the practice at the end of the year of selling underperforming stocks to claim the losses against income taxes.

"I never really take a lot of reading out of what happens in these last couple weeks of December until the tax-loss selling's behind us," said Pow.

"I think for 2008, the early weeks are going to be telling days in terms of what the year may look like," Pow added.   Continued...