August 25, 2008 / 8:53 PM / 10 years ago

CORRECTED - UPDATE 2-Toronto stocks tumble amid financial jitters

(Corrects paragraphs 7, 8, and bullet point, to show Maple Leaf fell to a 52-week low, not record low.)

* TSX slumps 1.2 percent in broad decline

* Financials weigh amid persistent credit jitters

* Maple Leaf slumps after meat recall

TORONTO, Aug 25 (Reuters) - The Toronto Stock Exchange’s main index gave up more than 150 points on Monday in a broad slump prompted by weak financials, as worries over growing fallout from the credit crisis rattled investor confidence.

Home-grown anxiety also weighed on the large financial sector as the major Canadian banks are set to report quarterly results this week. The group was down 1.9 percent.

Analysts said that expectations for the banks have been significantly lowered, and while they are optimistic there won’t be any nasty surprises, results will be less than last year.

Bank of Nova Scotia (BNS.TO) and Bank of Montreal (BMO.TO) are set to kick off the round of reports on Tuesday. Scotiabank closed down 2 percent at C$47.64, while BMO also slipped 2 percent to close at C$44.06.

The sector was also caught in the downward momentum of U.S. banks as Credit Suisse cut American International Group’s (AIG.N) price target and earnings estimate, while Lehman Brothers LEH.N fell on speculation a bid by Korea Development Bank won’t happen. See: [ID:nSEO367339].

The S&P/TSX composite index .GSPTSE closed down 158.33 points, or 1.18 percent, at 13,288.96, with all but one of its 10 main sectors lower.

Maple Leaf Foods (MFI.TO) also dragged on the index as its stock sank to a 52-week low after it expanded a recall of prepared meats associated with a food poisoning outbreak that has killed 12 people.

Maple Leaf, one of Canada’s largest food processors, closed down 10.2 percent at C$8.80 after falling as far as C$8.62 earlier in the day. See: [ID:nN25507255].

Precision Drilling PD_u.TO fell 4.5 percent to C$21.24 after it said it will buy U.S.-based Grey Wolf Inc GW.A in a $2 billion friendly cash and stock deal. See: [ID:nN25495723].

The energy and materials sectors fell 0.7 percent and 1.1 percent, respectively. Suncor Energy (SU.TO) eased 1.7 percent to C$59.32, while Inmet Mining IMN.TO lost 4.3 percent to C$61.75. ($1=$1.05 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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