TORONTO (Bloomberg) - Canadian stocks fell the most in more than three years after Canadian Imperial Bank of Commerce sold more than C$2.75 billion ($2.7 billion) in discounted stock to cover writedowns tied to US mortgages.

Suncor Energy Inc. and Goldcorp Inc. declined as oil and gold prices slid on concern that global consumption will be muted by a slowing US economy. Research In Motion Ltd. retreated on speculation losses at such US banks as Citigroup Inc. will lower demand for its BlackBerry e-mail phones.

"It shows that risk management was asleep at CIBC," said Paul Gardner, partner and portfolio manager at Avenue Investment Management in Toronto, which oversees about $90 million. The banks "did something bad and it may take a year to clear the decks. There may be more bad news."

The Standard & Poor's/TSX Composite Index dropped 381.50, or 2.8 percent, to 13,316.78 in Toronto, the steepest drop since April 28, 2004. The benchmark has retreated 3.7 percent this year on concern the US may go into recession, slowing the global expansion and crimping demand for Canada's exports. Five stocks fell for every one that rose.

CIBC fell C$2.07, or 2.9 percent, to C$70, taking its decline to 29 percent in a year. The nation's fifth-largest bank by assets sold its shares, at discounts of as much as nine percent to yesterday's close, to investors including Hong Kong billionaire Li Ka-Shing and Manulife Financial Corp. Manulife, Canada's largest insurer, slipped C$1.02 at C$37.30.

CIBC needs to shore up its balance sheet after announcing about $3.2 billion in pretax writedowns on its investments tied to the US sub-prime market. The bank indicated yesterday that it may take more writedowns as the value of its holdings decline. The six biggest Canadian lenders, excluding Toronto-Dominion Bank, have announced and taken writedowns of about C$4.7 billion on investments related to US sub-prime loans.

Royal Bank, the country's biggest lender by assets, dropped C$1.19 to C$48.51. Smaller rival Bank of Nova Scotia declined C$1.19 at C$47.21.

Citigroup Inc., the largest US bank, yesterday posted the biggest loss in its 196-year history as surging defaults on home loans forced it to write down the value of sub-prime-mortgage investments by $18 billion.

New York-based Citigroup cut its dividend by 41 percent, announced 4,200 job cuts and said it will receive $14.5 billion from outside investors to bolster capital.

Suncor Energy, the world's second-largest oil-sands miner, dropped C$5.84, or 5.5 percent, to C$100.61, its steepest drop since Oct. 2006. EnCana Corp., North America's biggest natural-gas producer, retreated C$2.67 at C$66.59. Smaller rival Canadian Natural Resources Ltd. decreased C$2.89 to C$70.60.

Potash Corp. of Saskatchewan Inc., the world's largest fertiliser maker, fell C$7.03, or 4.6 percent, to C$145.83, after rising 7.9 percent to a record on Monday.

Teck Cominco Ltd., Canada's biggest miner of such industrial metals as zinc and copper, fell C$1.57 to C$33.68.

Goldcorp, the world's second-largest bullion miner by market value, dropped C$1.83 to C$37.20. Barrick Gold Corp., the biggest miner of the metal, fell C$1.43 from a record to C$50.94.

Crude oil futures fell 2.4 percent to $91.98 a barrel in New York. Oil is still up 72 percent from a year ago after reaching a record $100.09 on January 3.

Gold fell from a record in New York and copper fell the most in six weeks, as some consumers judged prices rose too rapidly during the best start to a year in two decades.

"Eventually, oil will go to $150 a barrel," Mr. Gardner said. "But it'll go down to $75 first on a slowdown in the US, Europe, Japan, and even Canada." Gardner said he expects "pressure" on the S&P/TSX, because many commodities that rose to records in the past year may "take a breather" in 2008.

Such commodities as energy, metals, wheat and fertiliser account for about a third of the Canadian economy and more than half the nation's exports. Gauges of energy and raw-materials shares fell a respective 3.3 percent and 3.9 percent. Together with financial companies, down 2.2 percent yesterday, they make up about three-quarters of the S&P/TSX's value.

Research In Motion, declined C$5.98, or 6.1 percent, at C$92.35. On Monday, US securities firm Bear Stearns Cos. cut its share-price target for Research In Motion by 6.3 percent to $150, saying that computer hardware and storage companies may earn less profit because weaker economic growth will sap consumer spending. Financial companies, which are beginning to fire staff as credit losses mount, are among RIM's biggest customers.