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* TSX falls 217.51 points, or 1.72 percent, to 12,464.57 * All 10 main index sectors decline * CP Rail train derails; shares off 2.3 percent * TD names new CEO; shares down * Manulife slips 3 percent after executives in Asia leave By John Tilak TORONTO, April 3 (Reuters) - Canada's main stock index tumbled nearly 2 percent on Wednesday, recording its biggest percentage decline in more than nine months, as sluggish U.S. economic data dampened hopes for a smooth recovery and caused declines in all major sectors. The selloff erased nearly all the gains the index has made since the start of the year and took it to its lowest point in more than three months. An industry report showed the pace of growth in the U.S. services sector slowed in March to the lowest level in seven months as new orders and employment measures pulled back. "It's a broad selloff based on fear that there isn't going to be a rebound anytime soon," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "People are nervous," he added. "They're saying, 'I'm going to run for the hills and I'm going to take my money with me.'" The Toronto Stock Exchange's S&P/TSX composite index was down 217.51 points, or 1.72 percent, at 12,464.57 in late afternoon trade, after dropping to 12,390.79, its lowest point since Dec. 31, 2012. It was the biggest percentage drop for the index so far this year and its largest one-day fall since June 21, 2012. "I think the market is ahead of where the fundamentals would put it," said Michael Sprung, president of Sprung Investment Management. "There's likely to be a correction, and this could be the beginning of it." The benchmark Canadian index, falling for the third straight session, has had a wobbly climb since its lows in November, and it has badly trailed the record runs of its U.S. peers. All of the 10 sectors of the index were in the red. Financials, the index's weightiest sector, lost 1.4 percent. Royal Bank of Canada declined 1.4 percent to C$61.35. Shares of Manulife Financial Corp were down almost 3 percent at C$14.63 after news the insurer was losing two of its top executives in Asia. In other company news, Toronto-Dominion Bank said Chief Executive Ed Clark plans to retire in late 2014, and Bharat Masrani, group head of U.S. personal and commercial banking, will succeed him. TD shares were down 1.2 percent at C$83.47. Canadian Pacific Railway Ltd shares were down 2.3 percent C$123.41. The company said early estimates are that about four barrels of crude oil were spilled when one of its trains derailed in northern Ontario. The energy group gave back 2.9 percent. Suncor Energy Inc slipped 2.7 percent to C$30.35. The materials sector, which includes miners, fell 3.2 percent. Shares of gold producers slumped 4.5 percent, extending this year's dramatic decline. The group is down 23 percent since the start of the year. The price of bullion fell 1.5 percent, hitting a nine-month low. Barrick Gold Corp lost 4.5 percent to C$27.41.