* Weak U.S. economic outlook hits financials
* Gold one of the few bright spots
* Petro-Canada reports loss, cuts production outlook (Adds details)
TORONTO, Jan 29 (Reuters) - Toronto’s main stock index fell more than 1 percent on Thursday morning as the sliding price of crude and weak results in the oil patch pressured energy stocks, while fading optimism for a U.S. stimulus package and the economy weighed on financials.
Bank and insurance stocks gave up some of Wednesday’s sharp gains, dropping along with European and U.S. banking issues over worries that the $825 billion U.S. stimulus package could still face a bumpy road ahead. The bill passed in the U.S. House of Representatives late Wednesday but every Republican who voted was opposed.
TSX energy issues were also weaker, down 1.5 percent as the price of oil fell more than $1 towards $41 a barrel. The collapse in crude prices since the record highs hit last summer has hurt profits across the global industry. [ID:nLT765331]
Petro-Canada PCA.TO posted a quarterly loss, but operating earnings per share of C$1.07 beat expectations. Canada’s No. 4 oil producer and refiner also reduced its 2009 production range. [ID:nBNG390427]
Petro-Canada shares fell 3.5 percent to C$27.71.
At 10:30 a.m. (1530 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 120.63 points, or 1.35 percent, at 8,785.60. Seven of the index’s 10 main groups were in the red.
U.S. data painted a worsening economic picture south of the border, with new home sales falling in December in the largest monthly decline since 1994, while weekly continued jobless claims hit the highest level on record. U.S. December durable goods orders fell 2.6 percent, steeper than economists had expected.
“We’re having some weak numbers in the States today,” said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
“The durable goods and the weekly jobs data look really bad and that’s hurting financials a bit on both sides of the border today. Oil is off because of the weakening economy and the financial outlook in the States.”
Materials climbed 1.83 higher, kept afloat by a rebound in gold issues.
Five gold producers, who were mostly hammered this week, were the top advancers on the index. Barrick Gold (ABX.TO) was up 3.9 percent at C$45.68, while Goldcorp (G.TO) gained 3.7 percent to C$35.02. (Reporting by Ka Yan Ng; editing by Rob Wilson)