CANADA STOCKS-Toronto index sags on crude price, outlook

Wed Oct 22, 2008 12:03pm EDT
 
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* Energy issues fall as oil drops below $68 a barrel

* More rate cuts seen as retail sales drop

* Investors digest corporate results from Husky, CN Rail

TORONTO, Oct 22 (Reuters) - The Toronto Stock Exchange's main index fell sharply on Wednesday morning as sliding crude oil prices dragged down energy issues and a gloomy outlook for the broader economy and corporate earnings weighed on sentiment.

Shortly after 11:15 a.m. (1515 GMT), the S&P/TSX composite index .GSPTSE was down 226.39 points, or 2.3 percent, at 9,569.41, with eight of 10 main groups lower.

The decline adds to Tuesday's steep losses, which broke a two-day winning streak, amid falling commodity prices and investor disappointment over a smaller than expected rate cut by the Bank of Canada.

More rate cuts are seen with Wednesday's gloomy data as Canadian retail sales in August dropped for the first time in six months and the composite leading indicator for September was pulled down by sharp declines in the stock market. [ID:nN22363236]

Earnings on both sides of the border are also in focus, said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

"You're getting lower earnings over comparable quarters from most companies, which is obviously validation for lower stock prices," he said.   Continued...