TORONTO (Reuters) - Canada's main stock index recorded one of its steepest one-day percentage falls of the year on Wednesday due to concerns about U.S. economic growth, sluggish hiring, and renewed fears of a stimulus pullback.
The declines took the market to a one-month low, with weakness in almost all key sectors, and helped erase almost all the gains the index has made this year.
The lone bright spot was the gold sector, which climbed after the soft data fueled a rise in the price of bullion. <GOL/>
U.S. companies picked up the pace of hiring in May, but job growth remained sluggish and fell short of economists' expectations as the goods-producing sector shed payrolls, according a private sector report.
The report followed a slew of unimpressive data this week and suggested that the economic recovery might be hitting some road bumps.
"The market's catching up to some of the softer economic numbers," said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.
"Economic numbers are coming in a bit weaker than expected, and it seems maybe that markets moved too far ahead of the economy in the short term," he added.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 150.32 points, or 1.19 percent, at 12,443.65, falling earlier to 12,422.39, its lowest since May 7.
Investors also worried about whether the U.S. Federal Reserve will start scaling back its massive stimulus program. A central bank report said the U.S. economy expanded at a "modest to moderate" pace since mid-April while hiring remained relatively subdued.
"The market is still in a fairly unsettled state, trying to determine where we are and where we're going" said Fred Ketchen, director of equity trading at ScotiaMcLeod.
"The stimulus can't go on forever," he added. "Enjoy it while it's there, but it isn't going to last forever."
All of the 10 main sectors on the index were in the red.
Financials, the index's most heavily weighted sector, gave back 1.3 percent.
Royal Bank of Canada (RY.TO), the country's biggest bank, lost 1.1 percent to C$60.53.
Shares of energy producers fell 1.3 percent.
Penn West Petroleum Ltd PWT.TO named a former Marathon Oil Corp (MRO.N) executive as chief executive and said it would slash its dividend, cut 10 percent of its staff and review strategic options, such as asset divestments and joint ventures. Penn West shares fell 4.1 percent.
The materials group, which includes mining stocks, slipped despite a 0.7 percent rise in shares of gold companies.
Barrick Gold Corp (ABX.TO) was up 0.8 percent at C$21.76.
Centerra Gold Inc (CG.TO) rose 16.9 percent to C$4.98 after Kyrgyzstan's parliament set a new September 10 deadline for the government to agree to an improved deal with the miner or unilaterally cancel the current arrangement.
Additional reporting by Peter Henderson; Editing by Carol Bishopric