Toronto stocks slump as economic worries rise

Fri Jan 4, 2008 5:30pm EST
 
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By Leah Schnurr

TORONTO (Reuters) - Growing worries over the prospect of a recession south of the border weighed heavily on the Toronto Stock Exchange's main index on Friday, while resource issues retreated amid softer commodity prices.

The index tumbled immediately after the opening bell following data that showed weak U.S. job growth in December and rising unemployment.

The materials and energy sectors led the TSX lower, shedding 1.3 percent and 1.2 percent respectively, hurt by weaker gold and oil prices as well as worries that slower global growth could dampen demand for resources.

Suncor Energy SU.TO was down C$2.17, or 1.9 percent, at C$109.67, while Centerra Gold CG.TO was off 93 Canadian cents, or 6.8 percent, at C$12.73.

"The U.S. jobs numbers seem to have set everybody in a bad mood first thing this morning, and it stuck," said Julie Brough, vice-president at Morgan Meighen & Associates.

"It increased the concerns that the U.S. would fall into a recession, which is causing weakness across the board."

The S&P/TSX composite index .GSPTSE closed down 199.62 points, or 1.43 percent, at 13,778.58 -- its steepest decline in nearly three weeks. All of the TSX's 10 main groups finished lower.

The financials sector was squeezed by the economic jitters, falling 1.2 percent. Canadian Imperial Bank of Commerce CM.TO was down C$2.05, or 2.9 percent, at C$68.00, and Bank of Montreal BMO.TO declined 77 Canadian cents, or 1.4 percent, to C$55.27.   Continued...

 
<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. Growing worries over the prospect of a recession south of the border weighed heavily on the Toronto Stock Exchange's main index on Friday, while resource issues retreated amid softer commodity prices. REUTERS/Mark Blinch</p>