CANADA STOCKS-TSX falls hard on oil price, profit-taking

Wed Jan 7, 2009 5:12pm EST
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* All 10 of the TSX's main sectors end lower

* Commodity-related issues sag with oil, gold prices

* U.S. jobs data boosts fears of extended recession (Updates with closing figures, adds details and comments)

By Ka Yan Ng

TORONTO, Jan 7 (Reuters) - Toronto's main stock index dropped 3.7 percent on Wednesday as oil and gold shares slid with commodity prices and profit-taking set in after six sessions of gains.

Startling job losses in the United States and a warning from tech bellwether Intel Corp INTC.O added to the gloomy investor sentiment and heightened fears of an extended recession.

The energy sector slid 6.14 percent as the price of oil slumped nearly $6 a barrel to settle at $42.63 after a U.S. government inventory report showed supplies rose more than expected. Canadian Natural Resources CNQ.TO, the index's biggest mover, fell 8.3 percent to C$51.32. EnCana ECA.TO lost 5 percent to C$57.80.

"Oil by far was the biggest negative. People were looking for inventories to build, but they built a lot more than expectations and that's why the price of oil has come down," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"But the price of oil has rallied a fair bit also in the last two or three weeks."   Continued...