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TSX ends down 1.65% at 21,897.98

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Posts biggest decline since Feb. 13

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All ten major sectors end lower

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BMO falls 8.86% after earnings miss

By Fergal Smith

May 29 (Reuters) - Canada's main stock index fell to a

near four-week low on Wednesday as Bank of Montreal ( NRGD ) reported

disappointing results and investors worried borrowing costs

would remain elevated for longer than previously expected,

slowing economic growth.

The Toronto Stock Exchange's S&P/TSX composite index

ended down 367.07 points, or 1.65%, at 21,897.98, its

lowest closing level since May 2 and its biggest decline since

Feb. 13.

U.S. stocks also fell as Treasury yields climbed on concern

over the timing and scale of possible interest rate cuts from

the Federal Reserve.

"With rates staying higher that brings along the possibility

of a slowing economy," Michael Sprung, president at Sprung

Investment Management. "We could possibly be in for a rough ride

over the next number of months."

All ten major sectors on the Toronto market lost ground,

including a decline of 2.39% for heavily-weighted financials

.

Bank of Montreal ( NRGD ) reported weaker-than-expected

quarterly profit, hurt by higher loan loss provisions. Its

shares ended down 8.86%.

"The banks seem to be taking larger-than-expected provisions

for bad loans," Sprung said. "From their point of view, they're

being cautious, from the investors' point of view, it looks like

the banks think it's going to be worse than we had hoped."

The materials sector, which includes miners and

fertilizer companies, lost 2.15% as gold and copper prices fell.

The price of oil also decreased, settling 0.8% lower

at $79.23 a barrel. That weighed on energy, with the sector

ending down 1.73%.

The utilities group, which includes many

high-dividend paying stocks that could particularly benefit from

interest rate cuts, was down 2.34%.

National Bank of Canada ( NTIOF ) was a bright spot. Its

shares gained 2.55% after the lender reported a rise in

second-quarter net profit, helped by strong performance in its

wealth management and financial markets units.