The S&P/TSX composite index pulled back 284.11 points to close at 14,469.95, while the Canadian dollar ended at 87.91 cents US, down 0.07 of a cent.
Energy stocks dropped 4.96 per cent as the January crude oil contract fell 57 cents to settle at US$66.81 a barrel on the New York Mercantile Exchange, after news that Saudi Arabia reduced its January prices to U.S. and Asian customers.
Financial stocks were also lower as two more Canadian banks added to fourth-quarter earnings results that have largely underwhelmed investors.
TD Bank (TSX:TD) missed analyst expectations with net income of $1.75 billion, as it increased provisions for credit losses and other expense items. Shares of the bank dropped 5.1 per cent, or $2.88, to $54.03.
CIBC (TSX:CM) beat analyst expectations by one cent, as it reported a quarterly profit of $811 million that fell slightly from $825 million a year ago. The bank also raised its quarterly dividend by three cents to $1.03 per share. Its shares dropped 3.4 per cent, or $3.64, to $103.52.
Accelerating the TSX pullback was the looming deadline for tax-loss selling in the final week of December, which has likely motivated some decisions from investors, said Ron Meisels, president of Phases and Cycles in Montreal.
"Energy stocks are still the ones that are getting hammered, the price of oil is influencing the market, so generally speaking we see all of that coinciding," he said.
Meisels added that the TSX is undergoing a correction that should find support around 14,400, a floor the market hovered around in late October.
On Wall Street, the declines were less substantial with the Dow Jones industrials off 12.52 points to 17,900.10. The Nasdaq moved back 5.03 points to 4,769.44 while the S&P 500 index lost 2.41 points to 2,071.92.
The market moves in the U.S. followed news that the number of people seeking unemployment benefits slipped below 300,000 last week, after having spiked above that level in the prior week for the first time in nearly three months. The U.S. Labor Department said weekly applications fell 17,000 to a seasonally adjusted 297,000. The four-week average rose 4,750 to 299,000.
On Friday, November job figures will be released from both Canada and the United States, offering further insight into the momentum behind the economic growth.
In other key commodities, the February gold bullion contract fell $1 to US$1,207.70 an ounce, and the March copper contract moved ahead 4.3 cents at US$2.915 a pound.
Enbridge Inc. (TSX:ENB) shares lifted 10 per cent after the pipeline company announced a 33 per cent increase to its next quarterly common share dividend as part of a restructuring plan that will transfer part of its business to an affiliated income fund. Its stock gained $5.61 to $60.04.
Shares of Gildan Activewear Inc. (TSX:GIL) dropped more than nine per cent, falling $6.10 to $60.22, after the apparel maker said it expects to report a loss of 30 cents in the first quarter as it responds to lower sales with price cuts.
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Note to readers: This is a corrected story. A previous version misstated the percentage the energy sector moved.Suggest a correction