July 9, 2008 / 9:01 PM / 11 years ago

UPDATE 3-Toronto stocks slump in broad retreat

(Updates closing numbers, adds details)

* TSX retreats into official correction

* Financials hit by worries over credit crunch

* Concerns over outlook for second-quarter results

TORONTO, July 9 (Reuters) - A late day retreat pulled the Toronto Stock Exchange’s main index into an official correction on Wednesday, as it dropped almost 200 points amid worries over the economic outlook and weaker second-quarter results.

The large financial sector was down 2.8 percent as persistent worries spilled over from the United States on further impact from the credit crunch.

Energy shares, which had earlier helped lift the main index, retreated as the price of oil cut gains to settle just a penny higher after climbing more than $2.

Rick Hutcheon, president and chief operating officer at RKH Investments, said that results for the second quarter are expected to be weak, but if they come in better than expected, the market could stage a rally.

“I think we’re going to be on tenterhooks until we get a little further into the earnings season,” said Hutcheon.

The S&P/TSX composite index .GSPTSE closed down 198.93 points, or 1.44 percent, at 13,610.84, with all but one of its 10 main sectors in a downturn.

The index has tumbled 10.2 percent from the life high reached in the beginning of June, putting it in the general definition of a correction — usually seen as a 10 percent fall from the peak level.

The benchmark swung in a wide breadth during the choppy session, climbing as high as 13,981.17.

Among laggards in the oil patch, Canadian Natural Resources (CNQ.TO) was down C$3.12, or 3.5 percent, at C$85.76, and EnCana (ECA.TO) was off C$2.72, or 3.2 percent, at C$81.18. The sector overall lost 1.4 percent.

Among financials, Royal Bank of Canada (RY.TO) fell C$1.84, or 4 percent, to C$44.16, and Bank of Nova Scotia (BNS.TO) slid C$1.29, or 2.7 percent, to C$46.96.

Consumer stocks also took a beating amid concerns over a dampened appetite for spending in the face of soaring energy prices. Shoppers Drug Mart SC.TO was down C$1.47, or 2.7 percent, at C$52.70, while dairy products maker Saputo (SAP.TO) eased C$1.18, or 4.2 percent, to C$27.07. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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