January 8, 2008 / 9:47 PM / 11 years ago

UPDATE 3-Toronto stocks dragged lower by subprime fears

(Updates with official numbers, adds detail)

TORONTO, Jan 8 (Reuters) - The Toronto Stock Exchange’s main index ended lower on Tuesday after it reversed direction in the afternoon as fears of more fallout from the battered subprime mortgage market undercut gains by gold-mining issues.

After jumping more than 100 points earlier in the day, the index slumped for the third session in a row amid persistent worries over the health of the U.S. economy.

Jitters over the prospect of more bad news out of the U.S. subprime mortgage market weighed on the index even after U.S. mortgage lender Countrywide Financial Corp CFC.N denied market rumors that it was facing bankruptcy.

In Toronto, the financials sector was down 1 percent. Canadian Imperial Bank of Commerce (CM.TO) fell C$2.06, or 3 percent, to C$66.96, and Bank of Montreal (BMO.TO) lost 60 Canadian cents, or 1.1 percent, to C$55.55.

The S&P/TSX composite index .GSPTSE closed down 77.12 points, or 0.57 percent, at 13,541.75 with all but one of the 10 main groups in negative territory.

Despite an advance in oil prices, the energy sector gave up 0.5 percent amid worries that slower economic growth will dampen demand for resources.

The consumer discretionary group fell 2.1 percent, and the industrials sector shed 1.3 percent.

Materials was the sole sector on the upside, adding 1.4 percent, while gold mounted a new record high. The gold-producers subsector jumped 4.1 percent, with Barrick Gold (ABX.TO) gaining C$1.98, or 4.2 percent, to C$49.46.

Goldcorp Inc (G.TO) added 73 Canadian cents, or 2 percent, to C$38.05, after it said it expected gold production to grow by 13.5 percent this year.

$1=$1.01 Canadian Reporting by Leah Schnurr; editing Rob Wilson

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