Weakness in the energy sector dragged Toronto's main index nearly 2% lower on Friday. The index finished lower for the third time in four sessions.

The S&P/TSX Composite Index fell 174.44 points or 1.93% to end at 8,821/06. The drop took the market away from a 6 1/2 week high from the previous session.

Energy stocks dropped 3.1% as crude oil fell to $52.38, down $1.96 for the session. Paramount Resources (POU.UN.TO) dropped 5.3%, Encana (ECA.TO) fell 4.9% and Canadian Oil Sands (COS.UN.TO) declined 3.75%.

Penn West Energy Trust (PWT.UN.TO) plunged 10.5% after the company revealed it will limit its spending in 2009.

Great Plains Exploration (GPX.TO) gained 4.4% after reporting oil and gas sales for the quarter grew 61% to C$9.6 million from C$6.0 million in the same period last year. The company reported a net loss for the fourth quarter was C$2.5 million or C$0.03 per share, compared to profit of C$1.0 million or C$0.02 per share in the prior year period.

Gold stocks fell 2.9% as the metal dropped $16.70 to $923.20 an ounce on the Comex. Seabridge (SEA.TO) dropped 3.4%, Yamana (YRI.TO) has fell 3%, Goldcorp (G.TO) declined 2.8% and Barrick (ABX.TO) slipped 2.6%.

Materials stocks fell 2%. Agrium (AGU.TO) dropped 3.1% after the company revealed an increase in bid acquire CF Industries Holdings (CF). CF stockholders will now receive $35.00 in cash, an increase of $3.30, or 10.4%, in the cash consideration, as well as one common share of Agrium for each CF share.

The heavily-weighted Financial Index dropped 18% with all of the big six banks in the red. Toronto-Dominion Bank (TD.TO) lost 0.75% after the company said it will increase its public offering of preferred stock to 11 million shares. The gross proceeds of the offering will now be $275 million.

CIBC (CM.TO) fell 0.8%. According to the Globe and Mail, economist Jeff Rubin will leave the company at the end of March.

In other corporate news, Lululemon Athletica (LLL.TO) soared 10.1% after the company reported fourth quarter net income of $0.16 per share, a penny better than Wall Street's expectations.

Across the border, the Commerce Department reported personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, data showed personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

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