CANADA STOCKS-TSX sags on energy, financial weakness

Thu Jan 29, 2009 10:59am EST
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* 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.   Continued...