March 6 (Bloomberg) -- Canadian stocks fell for a fourth time in five days as financial shares declined on concern that credit- related losses may mount. Bank of Montreal paced the retreat with its steepest drop in almost eight years.

The Standard & Poor's/TSX Composite Index dropped along with U.S. stocks, after Thornburg Mortgage Inc. and a Carlyle Group bond fund received default notices and JPMorgan said UBS AG, Europe's biggest bank, may face more writedowns.

``Every day we come into the office there's another accident,'' said Stephen Carlin, who helps manage about $3.55 billion as co-head of Canadian equities at Toronto-based KBSH Capital Management Inc. ``Until the banks come clean there will continue to be an overhang on the sector.''

The S&P/TSX declined 242.88, or 1.8 percent, to 13,360.44 in Toronto. Four stocks fell for every one that rose, dragging down all 10 industry subgroups in the benchmark.

Bank of Montreal dropped the most since April 14, 2000, sliding 6.8 percent, to C$41.97, amid trading that was three times the daily average. Earlier, it fell as much as 7.7 percent, the biggest decline since at least Jan. 4, 1983, when Bloomberg records begin.

The country's fourth-largest lender reported a third-straight decline in quarterly profit this week after it took writedowns on trading losses and asset-backed securities tied to U.S. subprime loans. At least three brokers cut their recommendations on Bank of Montreal.

Subprime Write-offs

Canadian Imperial Bank of Commerce fell C$2.77, or 4.3 percent, to C$61.58, the most since Dec. 6. Subprime-related writedowns caused the country's fifth-largest bank to report last week the biggest quarterly loss in its history since a C$1.91 billion deficit in 2005 on costs tied to Enron Corp.'s collapse.

Smaller rival National Bank of Canada retreated C$1.97, or 4.1 percent, to C$46.45. National has the greatest exposure among Canadian lenders to the non-bank asset-backed commercial paper market. It bought back about C$2.1 billion in commercial paper from clients in August after the C$33 billion market for the short-term securities seized up amid worries about ties to U.S. subprime mortgages.

Royal Bank of Canada, the nation's biggest bank, fell the most in more than three years, dropping C$1.84, or 3.9 percent, at C$45.72. Bank of Nova Scotia fell C$1.74 to C$44.12. Toronto- Dominion Bank, the only one of Canada's six big banks to have avoided any writedowns to date, retreated C$2.25 to C$62.04.

Persisting Issue

``With the reporting season over some investors are realizing that the credit issues, unlike Enron for CIBC, are not one-offs, but are persisting,'' said Gareth Watson, who helps oversee about $65 billion as a Toronto-based Canadian equity adviser at ScotiaMcLeod. ``People may be focusing back on asset-backed commercial paper. That would explain why Bank of Montreal and National Bank were down the most.''

A measure of Canadian financial shares fell the most in six weeks, sliding 3.2 percent to the lowest since November 2005.

Data released today by the Mortgage Bankers Association showed that U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments rose.

Industrial shares declined 2.9 percent, led by railroads.

Canadian National Railway Co., the country's biggest railroad, fell C$1.86, or 3.5 percent, to C$50.83, the most in more than seven months. UBS Investment Bank analyst Fadi Chamoun in Toronto lowered his first-quarter earnings forecast for Canadian National by 5 cents to 64 cents a share, citing, in a note, increased fuel costs and bad weather.

Rival Canadian Pacific Railway Ltd. dropped C$1.88, or 2.7 percent, at C$68.56. Chamoun also cut his estimate for CP Rail.

Gold Producers

Barrick Gold Corp., the largest bullion miner, slid C$1.22 to C$50.93. Yamana Gold Inc. fell 30 cents at C$18.75.

Gold futures for April delivery fell 1.2 percent to $977.10 an ounce in New York. Some investors sold the metal after it soared to a record $995.20 an ounce yesterday.

Eldorado Gold Corp. surged 84 cents, or 13 percent, to C$7.49, the most since July 2002. The Toronto-based company said that mining at its Kisladag project in Turkey, forced to shut down for six months during an environmental dispute, has resumed.

Research In Motion Ltd., the maker of the BlackBerry e-mail phones, fell C$3.43, or 3.4 percent, at C$97. Rival Apple Inc., intending to lure corporate BlackBerry users to its iPhones, announced new business features, including one that pushes corporate e-mails to the phone.

Crude oil closed at a record $105.47 a barrel in New York after touching an all-time high of $105.97. Canadian Oil Sands Trust, lead partner in the world's biggest oil-sands producer, dropped C$1.50 from a record to C$43.98. Suncor Energy Inc., the second-biggest tar-sands miner, added 7 cents at C$107.77. Both were raised to ``buy'' from ``neutral'' by Merrill Lynch & Co.

To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.

Last Updated: March 6, 2008 17:16 EST