North American stocks markets slumped heavily on Tuesday amid growing worries over the health of the U.S. housing sector.

The S&P/TSX composite index lost 255.55 points, or 1.96%, to finish at 12,809.60, led by a 3.6% drop in the gold group, a 3.4% drop in the materials group, and declines of almost 3% in both the information technology and mining groups.

The financial services group was also down by 1.6%.

TD Bank shed $1.20 to $68.25 while Royal Bank lost 92¢ to $56.98.

The Canadian dollar declined 0.27 of a cent to US85.19¢.

The junior S&P/TSX Venture composite index fell 102.21 points, or 3.26%, to 3,032.87.

In New York, the Dow Jones industrial average dropped more than 242 points, or 1.97%, to end at 12,075.96. The tech-heavy Nasdaq composite index shed 51.72 points, or 2.15% to end at 2,350.57.

The broader S&P 500 lost 28.65 points, or 2.04%, to finish at 1,377.95.

The Dow shuddered in the wake of a report that late mortgage payments in the U.S. hit a 3.5 year high in the fourth quarter of 2006, and new foreclosures hit a record high.

A big loser on U.S. markets was Accredited Home Lenders Holding Co., a company that makes subprime, higher-risk loans. The company’s stock lost more than 65% to end at US$3.97 US on Nasdaq after saying it needed cash after paying US$190 million to its lenders.