UPDATE 4-Toronto stocks knocked down by oil, economic woes

Mon Jul 7, 2008 5:25pm EDT
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(Adds details, quotes)

* TSX tumbles more than 2 percent in broad retreat

* Energy shares lead slide as oil prices decline

* Worries persist over economic growth and consumer health

By Leah Schnurr

TORONTO, July 7 (Reuters) - The Toronto Stock Exchange's main index fell more than 2 percent on Monday, putting it on the cusp of a correction, as it was dragged down by weak resources and gloom over the outlook for economic growth.

Oil and gas companies led the descent, stung by a drop of nearly $4 in crude amid signs of easing tensions with Iran over its nuclear program.

But with the price of oil remaining high -- it is up more than 40 percent this year to above $141 a barrel -- intensifying worries over its impact on consumer spending and the economy took the broader market lower.

"We're more and more digesting the fact that oil is a key ingredient and it's very hard to grow an economy with oil at $140 or thereabouts," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc in Vancouver.   Continued...