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* TSX falls 41.75 points, or 0.3 percent, to 12,627.39 * Eight of the 10 main index sectors decline * TransCanada drops after quarterly results By John Tilak TORONTO, July 26 (Reuters) - Canada's main stock index was lower on Friday, hit again by disappointment over a quarterly report issued by Potash Corp the day before and undercut by renewed worry about the U.S. Federal Reserve plans for its monetary stimulus program. The return of Fed concerns and choppy trading in bullion ensured a volatile session for gold miners. They turned higher after an initial fall, only to retreat again. In the group, Barrick Gold Corp was down 0.6 percent at C$17.85. TransCanada Corp gave back 0.4 percent to C$46.24 after rising earlier in the day. Canada's No. 2 pipeline operator reported a 34 percent jump in second-quarter profit due to higher prices in its power-generation business. Focus was on the Fed's policy meeting next week, with the market again uneasy that it might dial back its stimulus program sharply. "We know eventually they've got to slow down the bond purchases, but the economy is not strong enough," said Sal Masionis, a stockbroker at Brant Securities. "There's a lack of confidence in the stock market," he added. "The more uncertainty there is out there, the less people want to invest." The Toronto Stock Exchange's S&P/TSX composite index was down 41.75 points, or 0.3 percent, at 12,627.39. It briefly turned positive earlier in the morning. Eight of the 10 main sectors on the index were in the red. The materials sector, which includes mining stocks, reversed earlier gains to fall 0.6 percent. Losses in the group were led by Potash Corp, which fell 1.9 percent to C$37.61. The stock was hit by a number of price-target cuts from analysts on Friday after the company released quarterly results on Thursday that fell short of expectations. It also cut its outlook. Energy shares fell 0.4 percent, mirroring weaker oil prices. Canadian Natural Resources was down 1.5 percent at C$33.19. Financials, the index's most heavily weighted sector, lost 0.1 percent. Manulife Financial Corp fell 0.4 percent to C$18.40, and Bank of Nova Scotia gave back 0.2 percent to C$58.23. Celestica Inc reported a 19 percent rise in second-quarter profit on Friday, driven mainly by growth in its communications business. Shares of the contract electronics manufacturer jumped 7.4 percent to C$10.50.