A late afternoon rally wasn’t enough to lift Toronto stocks into positive territory Wednesday. Slumping energy stocks hit the TSE especially hard.

The TSE 300 closed down 148.20 at 6,696 points. That’s a loss of 2%, although the composite index had been down as much as 3% earlier in the session.

Overall, just 2 of the TSE’s 14 sub-indices managed to eke out gains. Golds advanced 1.3%, while pipelines gained less than 1%

The oil and gas index fell sharply, closing down more than 4% on uncertainty surrounding oil prices. Financial services had another bad day, dropping nearly 2.5%.

Market momentum was deeply negative. Declines surpassed advances 802 to 313, with 187 issues closing unchanged. Volume was strong at 169 million shares.

Leading the selloff in energy stocks was Anderson Exploration. The day’s top trader closed down 13¢ at $39.41. Volume was a robust 16 million shares.

The session’s big winner was Bombardier. The stock rebounded today, gaining 88¢ to $13.74, up nearly 7%. There is speculation that many firms will abandon commercial airline travel and switch to smaller private jets.

Financials were weak on expected losses from the World Trade Center disaster itself, and the uncertainty surrounding markets generally. Manulife fell 3%, shedding $1.30 to $37.90. Sun Life closed down more than 1.5%. Canada’s largest banks all posted losses, with CIBC falling more than 3%.

The Canadian Venture Exchange was weaker today, the CDNX Index closed down 52.20 points at 2,785.07. Volume was 31.9 million shares, with 140 advances, 249 declines and 582 issues unchanged.

On Wall Street, the late rally wasn’t enough to move the major indices into positive territory. All three posted losses greater than 1%.

Stocks fought back from steep losses, but still ended lower as concerns about possible U.S. military retaliation against terrorists weighed on the market.

The Dow Jones industrial average close down 144 points to 8,759. The Nasdaq composite index was off 27 points at 1,528. The S&P 500 lost 17 points to close at 1,016.