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MARKETS LIVE BLOG:

STOCKS CLIMB AS DOW POSTS 8TH STRAIGHT WIN

Fed's Michelle Bowman echoes higher-for-longer mantra for interest rates

TSX slumps 2 percent as oil price weakness, U.S. data weighs

Reuters
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell more than 2 percent on Friday as a further slide in crude oil prices weighed heavily on energy shares, while jitters about domestic and global economic growth hit banks and industrial and consumer names.

The index dropped 3 percent for the week, its third straight weekly loss of more than 2.2 percent. It is at its weakest level since mid-2013 as a gloomy outlook sparks an investor retreat.

"A lot of that is some of the stress coming out of China, but I also think more and more people are questioning U.S. growth," said Michael Greenberg, a portfolio manager for Franklin Templeton Solutions.

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U.S. retail sales fell in December as unseasonably warm weather curbed purchases of winter apparel and cheaper gasoline weighed on receipts at service stations.

U.S. producer prices were also lower last month due to weak energy costs, while the country's industrial output declined for a third straight month.

Crude prices settled below $30 a barrel for the first time in 12 years as traders braced for an imminent rise in Iran's exports. [O/R]

The most influential weights on the Canadian index included some of its biggest energy stocks, with Canadian Natural Resources (Toronto:CNQ.TO - News) losing 5.6 percent to C$24.44 and Suncor Energy Inc (Toronto:SU.TO - News) down 3.6 percent to C$31.22.

The country's two biggest banks both fell 3.6 percent, with Royal Bank of Canada (Toronto:RY.TO - News) at C$67.05 and Toronto-Dominion Bank (Toronto:TD.TO - News) at C$49.45.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 262.57 points, or 2.13 percent, at 12,073.46.

The losses were broad: Every sector was in the red and most were off at least 1.5 percent. The energy group retreated 3.6 percent, and financials lost 2.9 percent.

TransAlta Corp (Toronto:TA.TO - News) slumped 13.8 percent to C$3.76 after the power generation company slashed its dividend to fund its transition away from coal. The utilities group, of which TransAlta is a part, fell 2.4 percent.

The materials group, which includes precious and base metal miners and fertilizer companies, was barely lower, helped by gains for gold miners, as bullion climbed nearly 2 percent. [GOL/]

Barrick Gold Corp (Toronto:ABX.TO - News) rose 5.4 percent to C$11.49, and Detour Gold Corp (Toronto:DGC.TO - News) jumped 6 percent to C$16.25 after announcing results late on Thursday.

Greenberg said that if bets on a string of U.S. Federal Reserve rate hikes this year start to look overly optimistic, gold miners could make further gains.

(Additional reporting by Fergal Smith; Editing by Lisa Von Ahn and Leslie Adler)