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TSX down 0.3% in broad-based declines

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Industrials, Healthcare, Consumer shares lead losses

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US Fed Chair Jerome Powell's comments pull up financial

shares

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Maple Leaf Foods ( MLFNF ) to split into two entities; shares jump

(Updates with closing figures, sectoral declines)

By Nikhil Sharma and Divya Rajagopal

July 9 (Reuters) - Canada's main stock index closed down

on Tuesday amid broad declines across sectors even as U.S.

Federal Reserve Chair Jerome Powell assured the U.S. Congress

that the economy was no longer overheated, raising hopes of a

rate cut.

The benchmark S&P/TSX composite index closed down

83 points, or 0.3%, at 22,042.5.

At the end of Tuesday's trade, the financial sector shares

at TSX closed in the green, as markets prepared for a possible

September rate cut in the U.S. and Powell began his two-day

monetary policy testimony before the Senate Banking Committee,

which began earlier in the day.

In the Canadian market, the industrials, materials and

consumer cyclicals led the broader declines with a loss of 1%

each.

Heavy-weight energy shares fell 1.5% in tandem

with oil prices.

Healthcare shares that opened in green, lost

their morning gains and closed down 0.4%.

Fears of recession loomed large after last week's data

showed a 6.4% rise in domestic unemployment.

Traders now expect a 64% chance of a rate cut by the Bank of

Canada in its next policy meeting on July 24.

Among individual stocks, Maple Leaf Foods ( MLFNF ) closed up

by 8% to top the Toronto Stock Exchange after the food processor

said it is splitting into two independent public entities by

spinning off its pork business.

Traders now expect a 64% chance of a rate cut by the

Bank of Canada in its next policy meeting on July 24.

"Policymakers are reluctant to cut because they don't want

to lower interest rates and see things spiral out of control

again on the inflation side, only to then raise rates again,"

said Allan Small, senior investment advisor at Allan Small

Financial Group with iA Private Wealth.

However, traders are pricing in a 75.2% chance of a rate cut

the Fed's September policy meeting.

Investors will also focus on U.S. consumer prices data due

on Thursday, which can further support rate-cut bets after last

week's softer jobs data.

On Wall Street, the S&P 500 and Nasdaq

indexes notched fresh record highs.