February 29, 2008 / 8:29 PM / 11 years ago

UPDATE 2-Toronto stocks tumble on resources, economic woes

(Updates stock prices, adds details)

TORONTO, Feb 29 (Reuters) - The Toronto Stock Exchange’s main index extended a sharp fall on Friday afternoon as resource shares weakened and worries of a recession in the United States resurfaced.

Materials and energy shares led the way down, shedding 2.3 percent and 2.1 percent respectively. Energy shares fell as oil prices stepped back from an earlier high above $103 a barrel amid easing geopolitical tensions.

Suncor Energy (SU.TO) slid C$2.06, or 2 percent, to C$101.79, while Canadian Natural Resources (CNQ.TO) lost C$1.67, or 2.2 percent, to C$73.53.

Declines in the gold producer subindex weighed on the larger materials group, caught in a downturn after bullion touched a high over $975 an ounce earlier in the day. The gold group was off 1.9 percent.

Barrick Gold (ABX.TO) was down C$1.11, or 2.1 percent, at C$50.89, while Potash Corp of Saskatchewan POT.TO gave up C$1.47, or 0.9 percent, at C$157.31.

The Toronto benchmark took its cue from declines south of the border as U.S. markets were hit by recession fears after a record loss at AIG (AIG.N) highlighted woes in the financial sector.

As well, a Reuters/University of Michigan Survey of consumers showed sentiment sagged to a 16-year low in February, adding to jitters over the economic health of the United States, Canada’s biggest trading partner.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 282.60 points, or 2.04 percent, at 13,591.29 with all 10 of its main groups negative.

Adding to the slump, the heavyweight financials sector fell 2 percent with Bank of Montreal (BMO.TO) down C$1.86, or 3.6 percent, at C$50.49. BMO said discussions on the restructuring of two troubled trusts the bank is exposed to are continuing, but that failed to reassure investors who are worried it will face further writedowns.

Royal Bank of Canada (RY.TO) was off 70 Canadian cents, or 1.4 percent, to C$49.42 after it reported its profit in the first quarter fell 17 percent, hurt, among other things, by writedowns on various U.S. securities.

Research In Motion RIM.TO, the maker of the BlackBerry, shed C$3.23, or 3 percent, to C$103.29, while the tech sector was down 1.9 percent.

The consumer discretionary group lost 2.4 percent, with Canadian Tire Corp’s (CTC.TO)(CTCa.TO) class A shares down C$2.69, or 4.2 percent, at C$60.99.

$1=$0.98 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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