UPDATE 2-Toronto stocks sink lower as resources slide

Thu Sep 25, 2008 11:48am EDT
 
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* Energy, materials fall on weakness in commodities

* Tanganyika Oil rises sharply after bid by Sinopec

* RBC sags after report says bank part of SEC probe (Adds details)

TORONTO, Sept 25 (Reuters) - The Toronto Stock Exchange's main index sank on Thursday morning as weakness in energy and materials issues offset optimism that the U.S. Congress might be close to agreeing on a rescue plan for the country's battered financial industry.

The hopes for the $700 billion bailout deal were tempered by gloomy U.S. manufactured goods and weekly jobless data See [ID:nN25327565], however, and a profit warning from U.S. economic bellwether General Electric (GE.N: Quote) [ID:nSP335584], said Rick Hutcheon, president and chief operating officer at RKH Investments.

"We're seeing a lot of directionless trading right now," said Hutcheon.

"Until we have a good feeling of the when and the how this deal is going to get done in the States you'll see the markets, and the sectors within those markets, just drift."

At around 11:35 a.m. EDT (1535 GMT), the S&P/TSX composite index .GSPTSE was down 89.03 points, or 0.71 percent, at 12,424.33, with six of its 10 main groups lower.

The energy and financial services sectors sank 0.4 percent 0.3 percent respectively.   Continued...