August 25, 2008 / 3:27 PM / 10 years ago

UPDATE 1-Toronto stocks down on energy, Maple Leaf

* Banks dip on credit jitters, ahead of results

* Maple Leaf slumps amid C$20 mln meat recall

* Precision Drilling to buy Grey Wolf in $2 bln deal (Adds details)

TORONTO, Aug 25 (Reuters) - The Toronto Stock Exchange’s main index fell more than 100 points on Monday morning, dragged down by the heavyweight energy and financial sectors, while Maple Leaf Foods (MFI.TO) tumbled amid a recall of meat products linked to a food-poisoning outbreak.

Activity in the energy sector was choppy, but by midmorning the group was down 1.4 percent as the price of oil remained below $115 a barrel in choppy trade Canadian Natural Resources (CNQ.TO) fell 1.3 percent to C$85.45.

Financials also weighed, slipping 1 percent, on nagging concerns over the health of the U.S. financial sector as Lehman Brothers LEH.N remained under the spotlight as a possible acquisition target.

Adding to fears, bank U.S. regulators closed Columbian Bank and Trust Company late on Friday. It is the ninth U.S. bank to fail this year, hit by the weakening economy and falling home prices.

“Market sentiment right now is banks are not making as much money as they used to,” said Francis Campeau, broker at MF Global Canada, in Montreal. “All Canadian banks are releasing earnings this week so you will see very choppy trading today.”

By midmorning, the S&P/TSX composite index .GSPTSE was down 116.51 points, or 0.9 percent, at 13,330.78, with eight of its 10 main groups lower.

The consumer staples sector was down 0.7 percent, with Maple Leaf down 7.5 percent at C$9.06 after it said it expects direct cost of about C$20 million ($19 million) from a nationwide meat recall linked to an outbreak of listeriosis. So far, the food poisoning has killed at least four people and sickened 21 others. See [ID:nN25507255].

On the merger front, Precision Drilling PD_u.TO announced its takeover of Grey Wolf GW.A in a cash and stock deal worth about $2 billion, creating one of the largest North American oil and gas rig operators. See [ID:nN24473807].

Precision Drilling slipped 6.8 percent to C$20.71.

As well, Q9 Networks Inc Q.TO, a provider of outsourced data infrastructure, soared 28.3 percent to C$16.70 after it said it has agreed to be bought by private equity firm Abry Partners in a cash transaction worth about C$361 million. See [ID:nN25376754].

The materials sector fell 0.4 percent, amid weakness in gold and some base metal prices. Goldcorp (G.TO) was down 0.3 percent at C$34.98, while Barrick Gold (ABX.TO) fell 0.6 percent to C$36.10 ($1=$1.05 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)

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