CANADA STOCKS-TSX lower as energy, financials weigh

Tue Feb 10, 2009 12:59pm EST
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* TSX reverses earlier gains, drops 1.25 pct

* Energy sector unwinds gains, falls 2.6 percent

* Equity markets sag as U.S. bank plan unveiled (Updates to midday, adds details, quotes)

TORONTO, Feb 10 (Reuters) - Toronto's main stock index fell more than 1 percent by midday on Tuesday as oil and gas issues unwound early gains and caution over the U.S. bank rescue plan dragged down the big financial services sector.

The heavily weighted financials group fell 3.1 percent, tumbling along with markets in the United States which retreated on caution over Washington's plan to shore up the troubled U.S. banking sector, unveiled on Tuesday [ID:nN102559].

The energy sector, down 2.6 percent, also helped to weigh down the resource-laden TSX as oil slipped below $39 a barrel on concerns about weak fuel demand. [ID:nSYD426207]

Heavily weighted stocks on the downside included Manulife Financial (MFC.TO: Quote), down 4.3 percent at C$20.44, and Royal Bank of Canada (RY.TO: Quote), which fell 2.5 percent to C$31.04.

"The market is just tracking Wall Street," said Fergal Smith, managing market strategist at Action Economics.

The U.S. Treasury unveiled a revamped financial rescue plan on Tuesday morning to cleanse billions in spoiled assets from banks' books. [ID:nN102559] [ID:nN26365728]   Continued...