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(Updates closing numbers, adds details, quotes)
*TSX index falls as financials hit by credit crunch worry
*Canadian Tire down after cuts earnings forecast
*Energy sector gains along with oil
TORONTO, Aug 7 (Reuters) - The Toronto Stock Exchange's main index finished lower on Thursday in a broad decline sparked by losses in the financial-services sector on nagging worries over more fallout from the credit crunch.
Canadian Tire CTCa.TO was the biggest drag on the index after it reported lower quarterly profit and cut its earnings forecast for the year. Shares of the country's largest auto parts and household goods retailer shed 7.7 percent.
Among financials, Manulife Financial (MFC.TO) lost 3.7 percent after it said profit fell, hurt by weak equity markets, a stronger Canadian dollar and tax-related provisions.
Banks were caught up by the downward momentum south of the border after insurer American International Group (AIG.N) reported a big loss after more writedowns.
"We saw a nice rally in the financials from the July 15 lows that was pretty much across the board, but I think every time the earnings come out, it seems to be some sort of a reality check," said Elvis Picardo, independent strategist in Vancouver, British Columbia.
The S&P/TSX composite index .GSPTSE closed down 68.34 points, or 0.51 percent, at 13,385.17 with six of its 10 main sectors pushing lower and one flat.
Financials led the downside, losing 2.8 percent. Manulife was down C$1.38 at C$36.22, and Canadian Imperial Bank of Commerce CM.TO fell C$1.92, or 3.1 percent, to C$61.00.
Canadian Tire was the biggest net loser, shedding C$4.02 to C$48.40.
On the upside, the energy sector pushed higher as oil prices rose on anticipation that a pipeline attacked by Kurdish separatists in Turkey could remain shut for up to two weeks.
Canadian Natural Resources CNQ.TO rose C$4.37, or 5.5 percent, to C$83.65 after record operating profits offset concerns over new cost overruns and delays at its Horizon oil sands project.
Elsewhere in the sector, Suncor Energy (SU.TO) gained C$1.01, or 1.9 percent, to C$55.31, and the group overall rose 1 percent. ($1=$1.05 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)