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* TSX falls 140.35 points, or 1.08 percent, to 12,907.43
* Energy, financial issues weigh most heavily
* Canadian and U.S. economic data weaker than expected
* Investors anxious over looming deadline on U.S. debt
* Moody's downgrade of Spain spurs euro zone debt fears
TORONTO, July 29 (Reuters) - Toronto's main stock index plunged to a one-month low on Friday as weak U.S. and Canadian economic data and worries over the U.S. debt impasse drove equity investors to the exits.
The index's energy sector weighed most heavily, down 1.13 percent, as the weak economic data dragged down oil prices. Suncor Energy (SU.TO) fell 1.6 percent to C$36.49.
Economically sensitive financials also lagged, down 1.02 percent. Bank of Nova Scotia (BNS.TO) was the top heavyweight decliner, down 1.5 percent at C$54.08, while Royal Bank of Canada (RY.TO) fell 1.08 percent to C$51.49.
Canadian data on Friday showed the economy unexpectedly shrank in May, with gross domestic product falling 0.3 percent from a month earlier. It was the largest drop since a matching decrease in May 2009. [N1E76S093]
U.S. figures showed the economy came perilously close to shrinking in the first quarter and grew at a meager 1.3 percent annual rate in the April-June period as consumer spending barely rose. [ID:nCAT005481]
"Overall the downgrading of economic growth is weighing on the markets," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis. She said that slower economic growth in recent months suggests the second half of the year may not be as strong as expected.
In the United States, U.S. Republican leaders scrambled to rescue their budget deficit-cutting plan after conservatives mounted a rebellion that heaped uncertainty on efforts to avert a government debt default on Aug. 2 that was predicted to have dire consequences. [MKTS/GLOB]
"While earnings have come in pretty strong, nobody is payinany attention," Warne said. "It's the economic news and the political uncertainty in the U.S. that's really dominating, and that's why we've got the TSX down so much."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 140.35 points, or 1.08 percent, at 12,907.43, the lowest level in a month. All 10 of the index's main groups were lower.
Adding to investor anxiety, rating agency Moody's placed Spain's Aa2 credit rating on review for possible downgrade, reviving fears of contagion in the euro zone debt crisis.
Helping to offset losses, Fairfax Financial (FFH.TO) rose 1.6 percent to C$376.01, after reporting stronger earnings for the second quarter.
Some gold-mining shares rose, as gold prices jumped to a record high. Centerra Gold (CG.TO) was up 1.4 percent at C$18.89. Gold miners as a group, however, were down 1.3 percent.
($1=$0.95 Canadian) (Reporting by Trish Nixon; editing by Peter Galloway)