Toronto stocks were caught in a late day selloff on Thursday sparked by worries over more fallout from the credit crunch.

The S&P/TSX composite index dropped 68.34 points, or 0.51%, to close at 13,385.17. Six of the 10 main TSX group finished lower.

The financials group fell 2.8% after U.S. insurer American International Group reported a big loss after more writedowns.

Manulife Financial was down $1.38, or 3.7% at $36.22 after reporting weaker Q2 earnings, and CIBC fell $1.92, or 3.1%, to C$61.00.

The energy sector climbed 1% as oil prices rose on anticipation that a pipeline attacked by Kurdish separatists in Turkey could remain shut for up to two weeks.

Canadian Natural Resources rose $4.37, or 5.5%, to $83.65 after record operating profits offset concerns over new cost overruns and delays at its Horizon oil sands project.

Suncor Energy gained C$1.01, or 1.9%, to $55.31.

Among individual stocks Canadian Tire was the biggest net loser, shedding $4.02, or 7.7% to $48.40, after it reported lower quarterly profit and cut its earnings forecast for the year

The junior S&P/TSX Venture composite index slipped 18.27 points, or 0.85%, to 2,130.19.

The Canadian dollar dropped 0.48 of a cent from Wednesday’s close to end at US94.97¢.

In New York, U.S. stocks tumbled after a big loss from insurer American International Group fueled fears of more fallout from the credit crisis.

On Wednesday, AIG, the world’s largest insurer, posted its third consecutive quarterly loss of more than US$5 billion as it wrote down bad mortgage-related investments.

As well, concerns about U.S. consumer spending arose after Wal-Mart Stores reported disappointing July sales results.

The Dow Jones industrial average slid 224.64 points, or 1.93%, to close at 11,431.43.

The S&P 500 fell 23.11 points, or 1.79%, to 1,266.08, while the Nasdaq composite index dropped 22.64 points, or 0.95%, to 2,355.73. Today’s declines followed two days of gains on Wall Street.