TORONTO (Bloomberg) - Canadian stocks fell for the first time in seven days, led by energy and commodity producers, as declining fuel and metal prices and an acceleration in US job cuts fed concern that the recession will depress demand.

Canadian Natural Resources Ltd. and EnCana Corp., Canada's two largest energy companies by market value, retreated as crude oil had its biggest drop in seven years. Manulife Financial Corp. fell on a report it is being probed by US officials over accounting practices in a collapsed tax shelter. Equinox Minerals Ltd. dropped after delaying construction of a treatment plant.

The Standard & Poor's/TSX Composite Index fell 3.7 percent to 9,121.32. The benchmark for Canadian stocks fell 35 percent in 2008, its steepest annual drop since 1931.

"Everyone is learning that 2009 is going to be a terrible year for the economy, and what can the stock market do in the face of that?" said Douglas Davis, CEO of Davis-Rea Ltd. in Toronto, which manages about C$420 million of mainly Canadian equities and bonds. "We had six strong up days in a row, and the market was ready to correct a bit."

Energy producers accounted for more than 40 percent of the index's decline. Oil futures tumbled 12 percent on the New York Mercantile Exchange after a US government report showed a bigger-than-expected increase in supplies. An industry report showed US companies cut more than one million jobs in November and December, two days before Canadian and US government reports that are forecast to show payrolls shrank last month.

Canadian Natural Resources fell 6.8 percent to C$51.32. EnCana dropped 5 percent to C$57.80.

Manulife Financial fell 5.3 percent to C$22.83. Canada's biggest insurer was asked for information by the attorney general of Indiana and officials in other states where Manulife does business, the National Post reported, citing people it did not identify.

Equinox Minerals fell 10 percent to C$1.80. The company said it is putting off building a uranium treatment plant because of the drop in the price of the metal and difficulty raising financing. Ivanhoe Mines Ltd. slid 14 percent to C$4.05 as copper and gold retreated.

Opti Canada Inc. led declines in oilsands developers. US groups including the Natural Resources Defense aim to block efforts to exclude oil sands from any climate-change agreement reached with Canada, the New York Times reported.

Opti Canada fell 12 percent to C$1.80. Nexen Inc. lost 8.9 percent to C$21.21. Petro-Canada declined 5.2 percent to C$29.32. UTS Energy Corp. fell 8.3 percent to 89 cents.