* TSX closes down 13.65 points to 14,122.85
* Eight of 10 sectors lower (Adds quotes, near-term outlook)
By Claire Sibonney
TORONTO, March 1 (Reuters) - Toronto's main stock index retreated from its highest level in almost three years on Tuesday, pulled lower by economic worries sparked by surging oil prices, even as gold hit a record peak.
U.S. Federal Reserve Chairman Ben Bernanke said the run-up in crude prices was unlikely to derail the U.S. economy, but his comments did little to reassure investors worried that turmoil in the Middle East could affect Saudi Arabia, the world's largest oil exporter. [ID:nN01145792]
Economically sensitive financials were down 0.7 percent despite solid results from Bank of Montreal (BMO.TO) and the Bank of Canada keeping interest rates on hold, as expected. [ID:nN01101155] [ID:nN01279267]
BMO ended 0.3 percent lower at C$61.77 while Toronto-Dominion Bank (TD.TO) dropped 1.7 percent to C$79.93.
"It's more a question of the leverage that Canadian financial institutions have to the broader economy, and any hint of weakness would translate into profit-taking in that group," said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
The fact that U.S. markets were down sharply also helped to take the steam out of the TSX's stronger start, said Picardo. [.N]
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 13.65 points, or 0.1 percent, at 14,122.85. Eight of its 10 main groups were lower. Earlier in the day, the TSX rose as high as 14,213.21, its best showing since July 2008.
The energy group drifted 0.2 percent lower, swayed by worries over global growth, despite U.S. crude futures ending above $99 a barrel. [O/R]
Suncor Energy (SU.TO) however still closed up 0.2 percent at C$45.76.
"There are different variables in terms of pricing out an oil stock. It's going to move in conjunction with the market as well as the oil price," said John Kurgan, senior market strategist at commodity futures brokerage Lind-Waldock Canada.
He added that profit-taking was a factor in the energy sector's slide.
Offsetting the broader decline, gold miners climbed 2.1 percent as bullion prices rose above $1,432 an ounce on safe-haven buying, spurred by the unrest in North Africa and the Middle East.
Goldcorp (G.TO) bounced up 3.6 percent to C$48.07, while Barrick Gold (ABX.TO) gained 2.2 percent to C$52.41. The broader materials group, home to gold miners, rallied 1.2 percent. [GOL/]
"One of the few pockets of strength we're seeing today is in the gold group ... that's more on account of overseas events than anything out here in Canada," added Picardo.
"Specifically, I think investors continue to be spooked by what's happening in the Middle East and this time around $100 oil is not necessarily seen as a good thing."
Base-metal miners, another materials component, fell 1 percent as the price of copper snapped a three-day advance. [MET/L]
Market watchers questioned how much higher the TSX could go given its current lofty levels.
Picardo said it's going to become more difficult to build on the gains of the last six months, given the remarkable run until now.
Kurgan added that direction will be largely driven by markets south of the border.
"It depends if the U.S. is undergoing a significant correction here or not," he said, noting the S&P 500 index fell 1.6 percent on the day to 1,306.33.
"The S&P has found support before in the 1,300 area. If it continues to find support there then I think the Canadian market will probably finish the week higher than it's been in years."
($1=$0.97 Canadian) (Reporting by Claire Sibonney; editing by Rob Wilson)