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* TSX falls 113.43 points to 10,958.33
* Ends week down 2.3 percent
* Energy, banks headline latest retreat (Adds details, quotes background)
By Frank Pingue
TORONTO, Oct 2 (Reuters) - Toronto's main stock index fell 1 percent to its lowest close in a month on Friday as a drop in oil prices rattled energy shares while surprisingly weak U.S. jobs data weighed on financial issues.
The 1.97 percent drop in the index's heavily weighted financials group was pegged on data that showed job losses in the United States totaled 263,000 in September, well above expectations for a decline of 180,000. [ID:nN01277999]
The index's energy sector checked out of the session 1.17 percent lower as oil prices fell more than 1 percent to below $70 a barrel as the U.S. jobs data raised doubts about the strength of the economic recovery. [O/R]
The S&P/TSX composite index .GSPTSE ended the session down 113.43 points, or 1.02 percent, at 10,958.33. That was well above the session low of 10,855.16, a 216-point decline that left the index at its lowest level since Sept. 3.
For the week, the TSX ended down 2.3 percent after ending lower in three of the past five sessions.
"We can attribute the weakness in the market to selloffs in the financial group and the energy group, and that's been driven largely by the soft jobs numbers," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
"But I also think there is a feeling that we've had a really good run on the TSX and we are seeing some significant profits being taken off the table."
Picardo suggested the early and steep selloff in the TSX was likely a knee-jerk reaction to the U.S. data, which many eventually figured did not signal the start of a reversal in the trend toward stabilization of the labor market.
Still, the initial drop was too much for the TSX to rebound from, given the impact that the slide in oil prices had on weighty energy shares.
Another drag on the TSX came from Pengrowth Energy Trust PGF_u.TO. The company's units skidded 6.7 percent to C$10.28 after it decided to cut its monthly payout to investors in order to conserve cash. [ID:nN02316351]
A Reuters poll released this week offered a median forecast that Canada's main stock index would finish 2009 with a gain of nearly 30 percent, given its heavy weighting in commodity and energy stocks, which would benefit from an economic recovery. [ID:nLT394850]
$1=$1.08 Canadian Editing by Rob Wilson