* TSX down for third day, falls 3.65 percent to 9,709.51
* First three-day fall since early April
* U.S. retail sales for April worse than expected
* All 10 TSX sectors decline, led by energy, financials (Adds details; updates closing numbers)
By Ka Yan Ng
TORONTO, May 13 (Reuters) - Toronto's main stock index fell for a third consecutive session on Wednesday with heavy losses in the energy and financial groups as soft U.S. retail sales figures wounded investor sentiment.
The weaker-than-expected retail sales report curbed hopes for a quick economic recovery, sparking a selloff in equity markets on both sides of the border.
U.S. data showed sales at U.S. retailers fell for a second straight month in April, pulled down by sluggish gasoline and electronic goods purchases. [ID:nN12361802]
"We've had series of very good numbers and this is one that put some doubt onto it. If you get a whole series of them, that's a very different case in point," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
"If anything, it's a sobering reminder of the economic situation."
The S&P/TSX composite index .GSPTSE sank 368.19 points, or 3.65 percent, to 9,709.51. The blue-chip S&P/TSX 60 fell 3.7 percent to 589.15.
All 10 of the index's main sectors were lower.
The oil and gas group, down 5.23 percent, was pressured by a softer crude oil price. Crude settled around $58 a barrel after reaching a six-month high above $60 earlier this week. [ID:nN13353521]
Financials were also a key laggard, backing away from more of the big strides higher they had made since early March. The sector was off 4.59 percent.
Leading the overall index lower was Royal Bank of Canada (RY.TO), which shed 4.69 percent to C$41.26. Oil company EnCana (ECA.TO) followed with a 4.49 percent drop to C$60.18. Canadian Natural Resources (CNQ.TO) lost 6.3 percent to C$58.18, while Manulife Financial (MFC.TO) shed 5.75 percent to C$21.30.
Despite a firm tone in the price of gold [ID:nLD689335], the mining-heavy materials group turned negative, down 1.5 percent, after limiting the TSX's losses earlier in the day.
Elvis Picardo, analyst and strategist at Global Securities in Vancouver, said the index was in a period of consolidation to digest recent gains.
Inevitably, with a third straight session of declines -- the last three-day swing lower was more than a month ago -- the question arises whether the TSX is in the midst of a serious pullback. The index hit a six-month high last week, posting its eighth weekly gain in the nine weeks since it hit a five-year low in March.
The index is up 30 percent since the March low, and up 8 percent year-to-date.
"There's bound to be some concern about whether this represents a new downleg. It's hard to say at this point but certainly I think this pause is something that the markets required," Picardo said.
$1=$1.17 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway