REFILE-UPDATE 1-Toronto stocks flat as financials sag

Tue Aug 26, 2008 11:26am EDT
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(Refiles to fix typo in headline)

* Financials drag as energy and materials rise

* Bank of Montreal sags after quarterly results

* Maple Leaf Foods slumps on meat recall (Adds details)

TORONTO, Aug 26 (Reuters) - The Toronto Stock Exchange's main index was flat in choppy trading on Tuesday morning, held back by sagging financials, as investors eyed quarterly results from the country's big banks.

The financial services sector slipped 1 percent with Bank of Montreal (BMO.TO: Quote), the first to report earnings, down 1.5 percent at C$43.38 on softer than expected earnings.

The market will focus on the financials sector through the week for clues on how hard Canadian banks have been hit by the U.S. credit crisis, said Julie Brough, vice-president at Morgan Meighen & Associates.

"It's the U.S. banks that have everyone on edge and until that is settled I don't think we'll be able to get great traction," said Brough.

She added investors will also closely watch bank results for any surprises on the domestic side.   Continued...