TORONTO (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 January 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 US sub-prime loans.

At least three brokers cut their recommendations on Bank of Montreal.

Canadian Imperial Bank of Commerce fell C$2.77, or 4.3 percent, to C$61.58, the most since December 6. Sub-prime-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.