(Corrects dividend amount to 5 cents in 2nd bullet point)

* Shares down nearly 3 percent

* Dividend slashed to 5 cents per share

HOUSTON, Nov 9 (Reuters) - Tesoro Corp (TSO.N: Quote, Profile, Research) said on Monday it cut its dividend in half as weak demand for fuel contributed to an 87 percent slide in the U.S. refiner's third-quarter profit.

Tesoro cut its quarterly dividend to 5 cents per share. Money saved by the payout reduction will be used to help fund the San Antonio, Texas, company's 2010 business plan, it said.

Tesoro reported third-quarter net earnings of $33 million or 24 cents per share, down from $259 million or $1.86 per share for the third quarter of 2008.

Shares of Tesoro were down 2.7 percent, or 37 cents, at $13.60 in morning trade on the New York Stock Exchange. (Reporting by Anna Driver, editing by Gerald E. McCormick)