September 4, 2008 / 4:00 PM / 10 years ago

UPDATE 1-Toronto stocks down sharply for third session

* TSX retreats further as resources slide

* Market sees third day of triple-digit losses

* Bombardier sags despite strong results (Adds details)

TORONTO, Sept 4 (Reuters) - The Toronto Stock Exchange’s main index skidded more than 2 percent on Thursday, falling sharply for the third day in a row on a retreat in oil prices and more worries over U.S. economic health.

The TSX’s 10 main sectors tumbled across the board led by a 3.1 percent fall in the influential energy group and a 3.2 percent drop in the materials group as their key underlying commodities, oil and gold, fell back.

The more than 300 point decline on Thursday marked the third day of triple-digit losses for the resource-heavy index this week.

The market dropped more than 160 points in the previous session when it was yanked lower by mounting concerns over falling demand for commodities. That came on the heels of a massive 471-point loss on Tuesday.

“After what we saw over the past few days, we are in a period of volatility,” Michael Sprung, president at Sprung and Co Investment Counsel.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 306.50 points, or 2.33 percent, at 12,831.22.

Investors were rattled on both sides of the border after a U.S. government report showed an unexpected jump in the number of people filing for jobless benefits in the recent week and by a report by ADP Employer Services showing that U.S. private employers slashed 33,000 jobs in August.

Financial shares slipped, with Royal Bank of Canada <RY.TO sliding 1.6 percent to C$48.87 and Manulife Financial (MFC.TO), a Canadian insurer off slipped 1.4 percent at C$37.80.

Energy stocks, which account for about 30 percent of the composite’s overall weighting, sagged following a reversal in the price of oil. Oil dropped more than $2 to below $107 a barrel, even as U.S. government data showed a surprise drawdown in crude stocks.

Canadian Natural Resources (CNQ.TO) fell 4.3 percent to C$78.48 while Nexen Inc NXY.TO fell 2.8 percent to C$29.27.

Industrial issues were led lower by Bombardier Inc (BBDb.TO), which fell 8.1 percent to C$7.72, despite results that showed it returned to profitability in the second quarter.

The country’s top railway companies also slipped with Canadian Pacific Railway (CP.TO) down 3.2 percent at C$62.54.

Materials slipped after gold retreated to $801 an ounce after topping $814 earlier in the day.

Agnico-Eagle Mines (AEM.TO), was down 2.7 percent at C$54.10 despite boosting its inferred gold resource at its Kittila project in Finland by 1 million ounces.

Among the gainers, Teranet Income Fund TF_u.TO rose 19 percent to C$11.15 after Borealis Infrastructure said on Thursday it planned to offer more than C$2 billion ($1.9 billion) in cash for the e-commerce company. ($1=$1.06 Canadian) (Reporting by Scott Anderson and Leah Schnurr; editing by Rob Wilson)

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