CANADA STOCKS-Oil price fall helps fuel big TSX drop

Thu May 21, 2009 4:55pm EDT
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* TSX ends down 2.76 percent at 9,949.59

* Energy sector, down 4.4 pct, leads TSX lower

* Oil retreat from 6-month high helps spark drop (Adds details, quote)

By Jennifer Kwan

TORONTO, May 21 (Reuters) - Toronto's main stock market index fell on Thursday after a two-day rally as a drop in oil prices from six-month highs pressured energy shares.

Oil CLc1 fell to settle at $61.05 a barrel from Wednesday's half-year high above $62 as signs of job market weakness fanned concerns about economic recovery. [ID:nSIN101873]

The TSX index's energy sector fell 4.4 percent, with EnCana Corp ECA.TO down 5.6 percent at C$58.76. Suncor Energy SU.TO fell 3.83 percent to C$34.87.

Toronto also followed world stocks lower as several U.S. economic reports fueled doubts about a quick economic recovery, while Standard & Poor's revised its UK ratings outlook lower.[ID:nN21281189], stoking concern that Washington's growing deficit could lead to a credit rating downgrade for the United States. [ID:nN21308232]

The glum news came a day after the U.S. Federal Reserve, in minutes released from its April policy meeting, cut its outlook for economic growth over the next three years and said a full recovery could take five or six years. [ID:nN21256165]   Continued...