A deep selloff hit North American stock markets on Friday amid continuing worries about the financial sector and the credit crunch.

The S&P/TSX composite index shed 291.20 points, or 2.1%, to at 13,582.69.

For the week, the benchmark index finished flat.

The TSX is now back below where it ended 2007.

The financials group was off 2.1%, as shares of Royal Bank and Bank of Montreal came under pressure.

Royal Bank was down 1.5% at $49.39 on a profit decline in the first quarter, while Bank of Montreal was down 5% to $49.70, amid worries the bank might have to take further writedowns on its investments in a couple of struggling trusts.

The mining group was off more than 3%, while the materials, information technology, energy, consumer discretionary and energy groups were all down at least 2%.

The energy sector fell 2% as crude prices slipped. The April crude contract on the New York Mercantile Exchange was off 75¢ to US$101.84 a barrel.

Canadian Natural Resources fell $1.44 to $73.76.

The gold sector declined 1.7% even though the April gold contract irose $7.50 to US$975 an ounce on the Nymex. Barrick Gold Corp. fell 80¢ to $51.20.

The junior S&P/TSX Venture composite index gave up 27.43 points, or 0.98%, to end at 2,782.07.

The Canadian dollar closed down 0.83 of a cent to US101.58¢as Statistics Canada reported the current account fell into deficit in the fourth quarter for the first time since 1999.

In New York, U.S. stocks tumbled as another round of weak economic data added to U.S. recession fears and a record loss at insurer AIG underscored worries about more write-downs in the financial sector.

Insurance company AIG, which is a component stock in the Dow, lost US$5.29 billion US in the fourth quarter on a money-bleeding credit portfolio.

AIG shares shed more than 6.5% to end at US$46.86 on the New York Stock Exchange.

The Dow Jones industrial average slid 315.79 points, or 2.51%, to end at 12,266.39. The S&P 500 fell 36.96 points, or 2.70%, to 1,330.72 while the Nasdaq composite index closed down 60.09 points, or 2.58%, to end at 2,271.48.

For the month, the Dow dropped 3%, and the S&P fell 3.5%, bringing its losses since markets peaked in October to about 15%. The Nasdaq dropped 5% for the month.

For the week, the Dow was down 0.9%, the S&P was down 1.6% and the Nasdaq was down 1.4%.