* TSX down 254.87 points, or 2.09 percent, at 11,955.01
* Touches weakest level since Aug. 10
* All 10 sectors lower; energy, materials weigh (Updates to close. Adds details, analyst’s comment)
TORONTO, Sept 21 (Reuters) - Toronto’s main stock index fell to its lowest level in over a month on Wednesday after the U.S. Federal Reserve promised action to boost the economy but also painted a grim picture of the outlook for growth.
The Fed said it would buy more long-term Treasury securities in an effort to lower borrowing rates. But investors worried the Fed’s latest plan would have little impact in an economy that appears to be stagnating. [.N]
”The stimulus that they talked about is a lot less than what people were hoping for,” said Michael Sprung, president at Sprung & Co Investment Counsel.
“The fear is that things are going to continue at a very very slow pace, ... We need to have some sort of a fiscal response as well, which is out of the Fed’s hands.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 254.87 points, or 2.09 percent, at 11,955.01. It fell as low as 11,948.40, its weakest level since Aug. 10.
Energy and materials stocks weighed most heavily, falling 2.9 percent and 2.1 percent respectively, as they tracked commodity prices lower. [O/R] [MET/L] [GOL/]
Suncor Energy (SU.TO) was down 2.6 percent at C$28.13, while Potash Corp POT.TO lost 2.6 percent to C$50.37, and Teck Resources TCKb.TO dropped 5.8 percent to C$34.03.
The economic uncertainty drove the industrials group down 4.1 percent. Canadian National Railway (CNR.TO) was the top heavyweight decliner, dropping 4.3 percent to C$65.65.
The Fed said U.S. economic growth remains slow, and that recent indicators point to continuing weakness in overall labor market conditions, while the unemployment rate remains elevated.
($1=$1.01 Canadian) (Reporting by Trish Nixon; editing by Peter Galloway)