Canadian Stocks Retreat, Led by Royal Bank, on Credit Concerns

Canadian stocks fell for the first time in three days, led by Royal Bank of Canada, after credit union Desjardins Group's writedown stoked concern that lenders may face more losses on the value of asset-backed securities.

``There's concern about anything financial,'' said Laura Wallace, who helps oversee about $308 million as managing director at Coleford Investment Management Ltd. in Toronto. ``There's more pain to come. The market's been too optimistic.''

The Standard & Poor's/TSX Composite Index dropped 250.11, or 1.8 percent, to 13,524.43 in Toronto. The benchmark had rallied for two days as some investors judged a five percent selloff earlier in the month may have been overdone.

Royal Bank, Bank of Nova Scotia, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce have announced writedowns in the past month, leaving analysts to speculate that National Bank of Canada and Bank of Montreal may follow suit before or during fourth-quarter earnings reports later this month.

Royal Bank, the nation's largest lender by assets, dropped C$1.30 to C$51.09. Smaller rival Bank of Nova Scotia, declined C$1.50 to C$50.09. CIBC retreated C$3.73, or 4 percent, to C$88.57, the most since August 2003, when it agreed to pay $2.4 billion to resolve claims by Enron Corp. shareholders.

National Bank fell 91 cents to C$51.32, while bank of Montreal dropped 41 cents to C$57.12.

Manulife Financial Corp. declined 46 cents to C$40.11. Canada's biggest insurer is not anticipating any ``significant losses'' related to its portfolio of sub-prime mortgages, which had diminished in size from about C$840 million at the end of the second quarter, Donald Guloien, chief investment officer, said on the company's third-quarter results conference call last week.
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