UPDATE 2-Toronto stocks plunge 4.2 pct amid global panic

Mon Jan 21, 2008 11:14am EST
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By Scott Anderson

TORONTO Jan 21 (Reuters) - Toronto's main stock market index plunged more than 500 points to its lowest level in more than 14 months on Monday, following a rout in overseas markets, as persisting worries over the well-being of the U.S. economy sent global investors running for the exits.

By late-morning, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE had lost 4.2 percent, or 533.61 points, to 12,203.51. Earlier, it had dropped to 12,181.20, its lowest since November 2006.

This was the biggest drop since mid-August when the TSX plunged 584.98 points in intraday activity before recouping much of the losses, as angst over the subprime mortgage crisis roiled the markets.

The closely watched U.S. markets were closed for Martin Luther King Day.

Toronto's stock market followed world markets lower as investors doubted an economic stimulus package unveiled late last week by President George W. Bush would be enough to shore up the U.S. economy.

"It's pretty ugly, but we're just following the global pattern," said Paul Hand, managing director at RBC Capital Markets. "It's all fears of more financial stress given the model lines and the overlay of a potential recession."

Every one of the TSX index's main groups fell, led by a 5.6 percent drop in the materials group and a 3.8 percent fall among energy shares. The heavily weighted financial group tumbled 4.1 percent.   Continued...