EMERGING MARKETS-LatAm down on profit taking, lower commodities

* Financials, commodities weigh on LatAm stocks

* Most LatAm currencies end weaker, Brazilian real firms

By Walter Brandimarte

NEW YORK, Aug 11 (Reuters) - Latin American financial
markets weakened on Tuesday as falling commodity prices hurt
prospects for the region's exports, providing investors with a
reason to sell and pocket recent gains.

Weakness in the U.S. financial sector, following a gloomy
outlook for banks issued by a prominent Wall Street analyst,
also weighed on investor sentiment.

In Brazil, bank stocks also fell after Itau Unibanco
ITAU4.SA, Latin America's largest bank by assets, reported a
14 percent fall in its second-quarter recurring profit as
provisions for bad loans grew.

Itau Unibanco's shares closed 4.1 percent lower on the Sao
Paulo Stock Exchange, pushing the Brazilian benchmark Bovespa
index .BVSP 1.88 percent lower -- its steepest single-day
decline in five weeks.

Mexico's IPC stock index .MXX followed suit, with a drop
of 1.78 percent, as investors started to second-guess the
magnitude of the recent rally in light of positive but still
modest improvements in economic data.

The MSCI stock index for Latin America .MILA00000PUS
slipped 2.81 percent, its worst performance since a 5 percent
sell-off on June 22.

"Today's news was not good, but there was nothing major.
Investors were really seeking an excuse to take profits," said
Newton Rosa, chief economist with SulAmerica Investimentos in
Sao Paulo.

Most Latin American currencies also weakened as commodities
slipped -- U.S. crude oil prices CLc1 settled 1.63 percent
down at $60.45 a barrel while copper prices HGU9 fell 3.40
cents to $2.7365 a pound.

The Mexican peso MXN= traded 0.68 percent lower at 13.03
per U.S. dollar in late afternoon while the Colombian peso
COP=STFX lost 0.66 percent to 2,045.50 per greenback.

The main exception in the region was the Brazilian real
BRBY, which closed 0.33 percent stronger at 1.843 per dollar
after investors saw an early weakening of the currency as an
opportunity to sell dollars.

"In the current situation, whenever the dollar goes above
1.85 reais, investors sell the greenback to take some profit,"
said Miriam Tavares, head of foreign exchange at AGK brokerage
in Sao Paulo.

As financial markets weakened, yield spreads between
emerging-market bonds and U.S. Treasuries, a key gauge of
investors' aversion to risk, widened 14 basis points to 362
basis points, according to the JPMorgan EMBI+ index 11EMJ.
(Additional reporting by Aluisio Alves and Jose de Castro in
Sao Paulo; Editing by Leslie Adler)