September 26, 2008 / 8:49 PM / 9 years ago

UPDATE 3-Toronto stocks hit by RIM, US bailout uncertainty

3 Min Read

* TSX index plunges more than 400 points

* RIM retreats 28 percent after softer forecast

* Energy shares fall along with oil price

* Uncertainty surrounds U.S. bailout proposal (Updates closing numbers, adds details, quotes

TORONTO, Sept 26 (Reuters) - The Toronto Stock Exchange's main index slumped more than 3 percent on Friday, battered by a selloff in Research In Motion, tumbling resource shares and uncertainty over the U.S. financial rescue plan.

Tech bellwether RIM RIM.TO set the tone as it skidded 28.2 percent to C$72.57 the day after the BlackBerry-maker said its profit will lag expectations as it spends money on developing a new generation of smartphones. For details see: [ID:nN26288076].

The heavyweight energy sector added to the pressure, sliding along with oil, which was hurt by worries over the bailout package. Among the losers, Canadian Natural Resources (CNQ.TO) fell 4.3 percent to C$80.56.

Uncertainty over the fate of the $700 billion bailout proposal rounded out the negative sentiment, as did the seizure of U.S. savings and loan Washington Mutual (WM.N), the biggest bank failure in U.S. history. See: [ID:nLQ501615].

"I think it's encapsulated by one word more than anything else, and the word is 'uncertainty'," said Peter Chandler, senior vice-president of Canaccord Capital in Waterloo, Ontario.

"Markets have an incredible ability to factor in good news and factor in bad news -- the thing that really unnerves markets is not knowing what the news is."

The S&P/TSX composite index .GSPTSE closed down 420.51 points, or 3.35 percent, at 12,126.00 with all but two of its 10 main sectors in a downturn. On the week the index was down 6.1 percent

Financial shares fell 2 percent, with Canadian Imperial Bank of Commerce (CM.TO) down 2.8 percent at C$62.18, and Bank of Montreal (BMO.TO) falling 3.8 percent to C$46.30.

Sun Life Financial Inc (SLF.TO) shed 6.1 percent to C$37.10 after it said it expected to take a third-quarter charge for its holdings in Washington Mutual, but could not yet quantify the impact. See: [ID:nN26276538].

The energy and materials sectors added to the pain, retreating 3.4 percent and 3.7 percent respectively. In the oil patch, Suncor Energy (SU.TO) was down 4.7 percent at C$46.55, while fertilizer firm Agrium (AGU.TO) sagged 15.2 percent to C$65.90.

$1=$1.03 Canadian Reporting by Leah Schnurr; editing by Rob Wilson

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