October 1, 2008 / 9:01 PM / 10 years ago

UPDATE 3-Toronto stocks lower on oil ahead of bailout vote

*TSX falls after Tuesday’s 4 pct rally

*Energy sector drops 2.7 percent as oil slides

(Adds details, analysts’ comments, updates figures)

TORONTO, Oct 1 (Reuters) - The Toronto Stock Exchange’s main index ended lower on Wednesday, pressured by economic worries and weakening oil prices, but it finished well off its morning lows on optimism that U.S. lawmakers would push through a revamped rescue plan for the financial sector.

Continuing oil price volatility pulled energy shares to a 2.7 percent loss as the price of crude fell below $100 a barrel, but the key financial and materials sectors largely held their ground ahead of a U.S. Senate vote on the rescue plan expected later on Wednesday.

“People certainly feel that something’s going to go through. Whether it goes through today, tonight, tomorrow or Friday is anyone’s guess,” said Bruce Latimer, a trader at Dundee Securities.

The S&P/TSX composite index .GSPTSE ended the session down 38.39 points, or 0.33 percent, at 11,714.51, a sharp improvement from its 200-point dive at mid-morning.

Among energy stocks, Suncor Energy (SU.TO) dropped 7.5 percent to C$40.70, while EnCana Corp (ECA.TO) retreated 3.7 percent to C$65.46.

Seven of the 10 TSX subgroups finished flat or higher, with the financials eking out a 0.66 percent gain and telecoms climbing 3.3 percent. Materials issues finished unchanged, as weakness among base metals producers was offset by strong gold-mining stocks.

The index rallied 4 percent on Tuesday on hopes a rescue deal would be passed this week, but that capped off a month in which the index dropped 15 percent, its worst September performance since 1931.

“I think what we saw today was sort of a wait-and-see market,” said Kate Warne, Canadian markets strategist at Edward Jones in St. Louis.

She noted that bleak U.S. employment and manufacturing data released on Wednesday did not bode well for Canadian exporters.

$1=$1.06 Canadian Reporting by Cameron French; Editing by Peter Galloway

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