TORONTO (Reuters) - Toronto's main stock index fell 3.1 percent yesterday as jitters about upcoming corporate earnings and the state of the global economy weighed on sentiment, while Nortel Networks shares dropped on news that it has filed for bankruptcy protection.

The Toronto Stock Exchange's S&P/TSX composite index closed down 273.19 points, or 3.1 percent, at 8,688.36. Earlier, it fell as low as 8,608.63, a loss of 3.9 percent, marking its lowest level since December 30.

After charging out of the gate in 2009 with a string of solid gains that had the index up 5.76 percent last week, a few losing sessions, mostly at the hand of lower oil prices, have now left the market down 3.3 percent on the year.

Nortel shares, easily the most active issue on the index, fell as much as 79 percent to eight Canadian cents as investors reacted to news ahead of the market open that the company had filed for bankruptcy protection. Nortel managed to claw back a small portion of its massive sell-off, finishing down 69 percent at 12 Canadian cents.

Canadian media companies added to worries about the outlook for corporate profits after Canwest Global Communications and Corus Entertainment said they expected to feel the impact of a slowing economy on advertising spending.

Canwest closed down 35 percent at 52 Canadian cents, while Corus lost 3.2 percent to finish at C$12.

But Cogeco Cable bucked the trend, up 2.5 percent at C$33 as it largely escaped the impact of a souring economy and posted a stronger quarterly profit helped by growth in its Canadian operations.

"Earnings estimates for a number of companies are still fairly optimistic," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

"The reason the markets are acting quite negatively to those earnings reports is that companies are not only failing to beat estimates but many of them are forecasting a gloomy outlook for this year and that really hasn't been factored into the earnings estimates here yet."

Nine of the index's main 10 groups were lower. The exception was a 0.1 percent bump higher in the consumer staples group despite US retail sales data that pointed to an intensifying recession.