TORONTO (Reuters) - The Toronto Stock Exchange's main index followed an erratic path lower yesterday, compounding the week's big losses as some strong earnings were eclipsed by technical selling and global worries over US lending markets.

The S&P/TSX composite index closed down 260.72 points, or 1.85 percent, at 13,844.60 after falling 400 points earlier in the session. There were a record 636,327 trades, the exchange operator said after market close. The index plunged 2.8 percent on Tuesday and has given up 4.3 percent in three days the steepest three-day slide in more than a year after hitting a record high last week.

"Even when some companies have reported good earnings we've had some pretty bizarre reactions with stocks going down," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd. in Calgary.

"And it only makes sense in the context of this type of a market where fear has taken hold and people are panicking."

The market was shaken by worries that damage from the US subprime mortgage sector could spread to other credit markets, making it harder to finance corporate deals. Global stock markets fell sharply as investors fled risky assets.

Nine of the TSX's 10 main sectors were lower, led by a 1.8 percent drop in the financials group, a 1.9 percent fall in materials, and a 2.2 percent slide by energy stocks. These three groups account for about three-quarters of the index.

Canadian Imperial Bank of Commerce, which has said it has both hedged and unhedged exposure to the high-risk US subprime real estate market, dropped C$2.03, or 2.2 percent, to C$92.37.

Toronto-Dominion Bank fell C$1.57, or 2.2 percent, to C$70.03, while Royal Bank of Canada was off C$1.11, or 2 percent, at C$54.96.

The market was also weakened by falling prices for gold, nickel and other metals. Base metals giant Teck Cominco dropped C$2.84, or 5.8 percent, to C$46.46.

Potash Corp. of Saskatchewan gained C$2.39, or three percent, to C$82.93 after reporting a higher second-quarter profit and boosting its outlook for the rest of the year. It led all weighted gainers.