TORONTO (Bloomberg) - Canadian stocks fell, led by financial companies and energy producers, after a US manufacturing report fanned speculation that a deepening North American recession will cut profits.

Manulife Financial Corp. led insurers and banks lower, after manufacturing in New York contracted at the fastest pace on record. Husky Energy Inc. paced a drop in energy shares as crude oil prices dropped. Research In Motion Ltd. declined before its earnings report, scheduled for December 18.

"Confidence is still lacking in the financial sector," said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto, which manages about C$3.5 billion.

The Standard & Poor's/TSX Composite Index fell 53.62, or 0.6 percent, to 8,461.83 in Toronto. Losses were limited as mining shares including Barrick Gold Corp. advanced as prices for the precious metal climbed to the highest in two months.

The main Canadian equity benchmark has fallen 39 percent in 2008, poised for its worst-ever annual drop, after slumping commodity prices and global credit losses of almost $1 trillion dragged down the energy, mining and finance shares that account for three-quarters of the index's value.

Manufacturing in the US, Canada's biggest export market, slumped further in November as exports tumbled and automakers slashed their assembly rate to the lowest level in more than 18 years, the Federal Reserve said today in Washington.

The New York Fed reported the weakest factory performance in its region this month since its survey began in 2001. Canada sends about three-quarters of its exports to the US and it the biggest supplier of oil and gas to the neighboring country.

Manulife Financial slipped 3.2 percent to C$20.31. Canada's biggest insurance company has its share-price target lowered by at least two analysts today after it completed a C$2.275 billion share sale last week to shore up capital.