TORONTO (Bloomberg) - Canadian stocks fell a second day as commodity producers and financial shares slid with resource prices and reports showed the economy is deteriorating.

Barrick Gold Corp. dropped to a 13-month low as the price of the metal slumped on speculation that investors will sell it to cover losses in other markets. Manulife Financial Corp. declined for a second day after analysts cut the insurer's earnings and share-price estimates.

The Standard & Poor's/TSX Composite Index pared its drop late in the session as US stocks erased losses, with the Dow Jones Industrial Average swinging more than 700 points, after oil's drop below $70 a barrel spurred a rally in consumer stocks including Research In Motion Ltd. EnCana Corp. paced a rebound among energy shares from the lowest levels since January 2005.

"The world's problems haven't been solved in a few hours," said Fred Ketchen, who oversees about $85 million as managing director of equity trading at Scotia McLeod Inc. in Toronto. "Cheap oil gets Americans excited because they like to go out and do things. Some people don't believe oil will stay this low and they're out there looking for bargains."

The S&P/TSX fell 0.6 percent to 9,269.97 in Toronto after earlier sliding six percent to the lowest intra-day level since October 2004. Canada's equity benchmark has fallen 39 percent from its June 18 record after commodity prices retreated on concern that $640 billion in global credit losses and writedowns will slow growth and demand for raw materials.

Canadian factory shipments fell 3.7 percent in August, the most since last December and more than economists predicted, as sales of oil and coal tumbled, Statistics Canada said yesterday. The data indicates manufacturers are being hurt by cooling demand from the US, where 75 percent of Canadian exports go. The US Federal Reserve said today that industrial production fell last month by the most in almost 34 years.

Barrick Gold, the largest bullion miner, fell 13 percent to C$29.04. Goldcorp Inc., the second-biggest, dropped 11 percent to C$23.63. Kinross Gold Corp. slid 16 percent to C$12.90.

Ivanhoe Mines Ltd., building a copper and gold mine in Mongolia, fell 16 percent to C$3.05, the lowest since 2002.

First Quantum Minerals Ltd. fell 7.1 percent to C$22. The miner of copper in Africa had its share target cut 41 percent to C$95 by Raymond James & Associates analyst Tom Meyer in Toronto.

Gold futures fell 4.1 percent to $804.50 an ounce in New York, and platinum, used in such industrial applications as catalytic converters for cars, tumbled almost nine percent. Copper dropped to the lowest since January 2006. Crude oil futures slid 6.3 percent to $69.85 a barrel, after US inventories increased more than twice as much as forecast.