Oil drags TSX to two-month low

Toronto's main stock index skidded to its lowest close in nearly two months yesterday as a drop in oil prices shook EnCana Corp. (ECA/TSX) and other energy companies amid anxiety about the strength of economic recovery, while gold miners also weighed.

EnCana shares ended down 4% at $59.74, Suncor Energy Inc. (SU/TSX) shed 3.2% to $35.82, and Canadian Natural Resources Ltd. (CNQ/TSX) fell 3.6% to $70.50. The companies were the three biggest drags on the TSX index.

The latest slide in the heavily weighted energy sector came as oil prices fell more than 2% on worries about demand in the United States, the world's largest fuel consumer. Oil closed at US$77.46, down US$2.09.

Shares of gold miners were also among the key drags on the TSX as the price of bullion hit a three-week low in the face of a stronger U.S. dollar, which makes bullion more expensive for non-U.S. dollar holders.

Shares in Kinross Gold Corp. (K/ TSX) fell 4.6% to $19.36, while Barrick Gold Corp. (ABX/TSX) dropped 3.5% to $37.04.

The S&P/TSX composite index fell 248.21 points, or 2.25%, to 10,805.33. It was the TSX's lowest level since Sept. 3, and its fourth straight lower close.

The index, however, is still up 44% from the five-year low in hit in March.