RTTNews - Bay Street stocks have dropped sharply on Tuesday morning, giving back some of a recent rally. Resource stocks are notably lower to lead the weakness.

The S&P/TSX Composite Index has plummeted 161.01 points or 1.49% to move at 10,596.42. The market had closed at its highest level in almost eight months yesterday.

Gold stocks are down 3.8% and materials stocks are off 3.1% as the precious metal has lost $11.10 to $942.40 per ounce. Iamgold (IMG.TO) has dropped 5.7%, Agnico-Eagle Mines (AEM.TO) is down 4.9% and Goldcorp (G.TO) has dropped 4.4%.

Mining stocks have dropped 2.7%. Inmet Mining Corp. (IMN.TO) is down 2.4% after the company said its second-quarter net income decreased to C$66.5 million or C$1.37 per share from C$67.7 million or C$1.40 per share in the prior year period.

Energy stocks are down 2% as crude oil has dropped $1.40 to $66.98 per barrel. Encana (ECA.TO) has dropped 2.7%, Canadian Natural Resources (CNQ.TO) is down 2.5% and Suncor (SU.TO) is down 2.25%.

Canadian Oil Sands (COS.UN.TO) is down 0.6% after the company reported net income for the second quarter of $46 million or $0.10 per unit, compared with $497 million or $1.04 per unit a year ago.

Nexen (NXY.TO) is down 1.7% after the company said it priced and agreed to issue US$1.0 billion of senior notes, consisting of US$300 million principal amount of 6.20% senior notes due July 30, 2019 and US$700 million principal amount of 7.50% senior notes due July 30, 2039.

In other corporate news, Rogers Communications (RCI-A.TO) dropped 4.7% after the wireless giant predicted fiscal 2009 revenue growth of 2% to 4%, compared with its prior estimate range of 5% to 9%. The company's net income for the quarter increased to C$374 million or C$0.59 per share, from C$301 million or C$0.47 per share reported in the same quarter of last year.

QLT (QLT.TO) is up 0.5% after the company reported second-quarter net income of US$8.63 million, or US$0.16 per share, compared with a net loss of US$7.44 million, or US$0.10 per share, a year ago.

BioMS Medical Corp. (MS.TO) has plunged 87.2% after the pharmaceutical company and its partner Eli Lilly and Co. (LLY) said that dirucotide did not meet the primary endpoint of delaying disease progression during the two-year MAESTRO-01 Phase III trial in patients with secondary progressive multiple sclerosis.

Magna International (MG.A.TO) was upgraded to Buy from Hold at Genuity Capital Markets. However, the stock has dropped 4%.

On the economic front, 778,700 Canadians received unemployment benefits In May, Up 9.2% From April. This marks the highest number since records began being kept in 1997.

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