TORONTO (Bloomberg) - Canadian stocks fell, snapping a four-day rally, as oil's retreat and Petro-Canada's loss sent energy shares lower and worse-than-estimated earnings at US insurer Allstate Corp. spurred a drop in banks and insurers.

Petro-Canada, the country's fourth-largest oil company, fell four percent after reporting a loss on foreign currency exchanges, project delays and lower commodity prices.

Manulife Financial Corp., Canada's largest insurer, tumbled 6.1 percent after Allstate, the largest publicly traded American home and auto insurer, reported a quarterly loss that may end the company's 14-year streak of boosting its dividend.

Crude oil for March delivery dropped 1.1 percent to $41.44 a barrel. Energy shares account for 27 percent of the Canadian stock benchmark.

"Where energy goes, Canada goes," said Greg Taylor, who helps oversee about $1.6 billion as a portfolio manager with Aurion Capital in Toronto. "The oils right now are under pressure because no one can figure out what the commodity is going to do."

The Standard & Poor's/TSX Composite Index fell 1.6 percent to 8,762.76, ending its longest winning streak since January 6. Canada's main stock benchmark has slipped 2.5 percent in 2009, adding to its 35 percent drop last year, when the US, Europe and Japan entered recessions.

Petro-Canada fell C$1.14 to C$27.56. The fourth-quarter loss was C$691 million ($564.7 million) compared with net income of C$522 million a year earlier, after the company booked charges from the deferral of its Fort Hills mining project in Alberta.

The earnings results also reflect "losses on foreign currency translation of long-term debt" and "the negative impact from declining crude oil feedstock costs", Petro-Canada said.

Energy shares dropped 2.1 percent as crude oil fell after US stockpiles increased more than forecast and government reports signaled that the recession will deepen, curbing demand. EnCana Corp., Canada's biggest energy company by market value, lost C$2.03, or 3.6 percent, to C$55.19. Suncor Energy Inc., the world's second-largest oil-sands producer, declined C$1.03, or 4.1 percent, to C$24.07.

Nova Chemicals Corp. declined 76 cents, or 17 percent, to C$3.73. Canada's largest chemical maker reported a net loss of $214 million in the fourth quarter as weak demand for plastic resins slashed sales by the most in eight years.

Financial stocks, which had rallied 9.3 percent in the week's first three sessions, fell 4.3 percent. Manulife Financial Corp., Canada's largest insurer, led declines after Allstate Chief Executive Officer Tom Wilson said he's cutting 1,000 jobs at the life insurance business and reviewing the products sold by the unit after it caused Allstate to lose $1.13 billion.

Manulife dropped 6.1 percent to C$20.57. Royal Bank of Canada, the country's biggest lender slid 4.3 percent to C$30.31.

Canadian stocks also fell after Statistics Canada said the nation's factory and raw material costs fell in December, declining in tandem for a fourth straight month because of lower oil prices.

US stocks fell, halting a four-day advance, as more companies posted disappointing earnings and reports on durable goods, home sales and jobless claims spurred concern the recession is deepening.

Canadian Oil Sands Trust added 6.3 percent to C$18.50. The largest oilsands producer was raised to "sector perform" from "sector underperform" by analysts at Scotia Capital because the company reported fourth-quarter funds from operations that topped their estimates and the stock is "attractively valued" after a 37 percent sell-off since November.

Raw-materials producers gained 3.7 percent. Gold rose as the slide in US equity markets sparked demand for the precious metal as a store of value. Barrick Gold Corp., the world's largest gold producer, climbed 7.2 percent to C$47.14. Kinross Gold Corp., Canada's third-largest gold producer, gained 7.5 percent to C$22.04. Goldcorp Inc., the second-largest gold producer by market value, increased 6.9 percent to C$36.11.

Barrick Chairman Peter Munk said gold prices will top $1,000 an ounce as investors buy the metal to guard against "uncertainty" from financial-market turmoil.