August 19, 2008 / 8:38 PM / 11 years ago

UPDATE 3-Toronto stocks falter as financials slide

(Updates closing numbers, adds detail)

* TSX ends lower in broad decline, amid economic fears

* Financials hurt by more worries over credit crunch

* Resources gain along with commodity prices

TORONTO, Aug 19 (Reuters) - The Toronto Stock Exchange’s main index sagged on Tuesday, pressured by festering worries over the credit crisis and U.S. economic outlook, which offset a rally in commodities.

The financial sector led the way down, dragged under along with U.S. bank stocks after a forecast that U.S. investment bank Lehman Brothers LEH.N will take a further $4 billion in writedowns in the third quarter. See: [ID:nBNG259145].

The forecast from JPMorgan Securities deepened worries over more fallout to come from the credit crunch, taking Bay Street’s bank sector down 3.2 percent. Among the decliners, Canadian Imperial Bank of Commerce (CM.TO) slid 3 percent.

Sour economic data also injected a negative tone after data showed U.S. wholesale prices shot up in July, while home builders cut back on construction. The data underscored worries of rising inflation and a housing market that continues to deteriorate.

The S&P/TSX composite index .GSPTSE closed down 55.52 points, or 0.42 percent, at 13,063.85.

CIBC fell 3 percent to C$58.45, while Toronto-Dominion Bank (TD.TO) lost 4.7 percent to C$59.00.

But a rebound in gold, oil and other commodities, while the U.S. dollar weakened, cushioned the losses as advancing resource shares helped bring the Toronto benchmark back from a triple-digit loss.

The materials and energy sectors were the only two groups to make gains, rising 1.8 percent and 2.1 percent, respectively.

Canadian Natural Resources (CNQ.TO) was up 3.3 percent at C$82.27, while Agnico-Eagle Mines (AEM.TO) climbed 4.5 percent to C$57.42. ($1=$1.06 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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