TORONTO (Bloomberg) - Canadian stocks rose, paring the main index's weekly drop, as a rally in banks and insurance shares, led by Manulife Financial Corp., overshadowed declines in commodity producers such as Canadian Natural Resources Ltd.

The Standard & Poor's/TSX Composite Index rose 59.21, or 0.7 percent, to 8,126.03. The S&P/TSX fell as much as 3.1 percent to near a five-year low earlier in the session and still lost 12 percent over five days in its biggest weekly drop since October 10.

"I think there's a feeling the sell-off was overdone," said John Stephenson, who helps to oversee about $1.5 billion at First Asset Investment Management Inc. in Toronto. "It was a pretty ugly week."

Manulife, Canada's biggest insurance company, rose 6.8 percent to C$20.80, rebounding from a 19 percent slump in the previous four days. Hartford Financial Services Group Inc. led a rally in North American insurance stocks after it predicted higher earnings and said that it is managing the credit crisis.

Canadian Imperial Bank of Commerce added 7.7 percent to C$49.75, climbing for third day after reporting yesterday better-than-estimated estimated earnings even as fourth-quarter profit dropped 51 percent because of writedowns on debt investments.

"The Canadian banks are in much better shape than their US counterparts," said Mr. Stephenson. " When an insurer like Hartford raises the forecast that's a pretty encouraging sign."

A measure of raw-materials producers slid 0.4 percent today and dropped 17 percent this week, the most in three years. Energy shares fell 0.9 percent, taking its decline over five days to 18 percent.

Canadian Natural Resources, the country's fourth-largest energy company, fell 1.7 percent to C$39.33 and lost 24 percent of its value this week. Canadian Oil Sands Trust retreated 4.8 percent to C$19.62.

Barrick Gold Corp., the largest bullion mining company in the world, fell 3.1 percent to C$32.06

Crude oil fell for a sixth day in New York, heading for the biggest weekly drop since 1991, on concern demand will decline after a report showed US employers cut jobs in November at the fastest pace since 1974. Gold fell to the lowest in two weeks.

Plunging prices for crude oil, copper and corn sent the Reuters/Jefferies CRB Index of 19 raw materials to its lowest level in more than six years on concern a deepening global recession will slash demand.

"Today you saw the jobless numbers in the US," said John Kinsey, who helps manage about C$1 billion at Caldwell Securities Ltd. in Toronto. "It all is part and parcel of the same economic package. Recession backs up into commodities. People don't use as much gasoline and people don't drive their cars as much, so it all does tie together."