Toronto stocks dive as Fed rate cut disappoints

Tue Dec 11, 2007 4:04pm EST
 
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TORONTO Dec 11 (Reuters) - The Toronto Stock Exchange's main index plunged more than 200 points on Tuesday as investors who expected an aggressive U.S. interest rate cut were disappointed by a more modest move and instability fears continued to weigh on the market.

The S&P/TSX composite index was down 217.51 points, or 1.56 percent, to unofficially close at 13,722.85.

The drop wiped out gains seen earlier in the session and came after the U.S. Federal Reserve cut the key fed funds rate by 25 basis points to 4.25 percent. The central bank also reduced the discount rate it charges banks for direct loans by 25 basis points to 4.75 percent. ($1=$1.01 Canadian) (Reporting by Wojtek Dabrowski; Editing by Peter Galloway)