Major North American stock indices racked up triple-digit losses Friday on concerns over the health of the economy.

In Toronto, the S&P/TSX composite index closed down 209.48 points, or 1.42%, to 14,580.67 on top of a 283-point dive the day before.

For the week, the main index lost 197.79 points or 1.3%.

The financial sector moved down 2.37%, after a 1% slide Thursday. CIBC fell $1.87 to $61.63 while Royal Bank gave back $1.29 to $47.60.

The energy sector lost early gains, falling 1.1% as oil prices started to recover from Thursday’s US$4.75 slide triggered by China’s move to restrain fuel consumption by raising government-controlled prices by 16% for gasoline and 18% for diesel fuel.

The July crude contract on the New York Mercantile Exchange moved up $2.69 to settle at US$134.62 a barrel ahead of this weekend’s international meeting in Saudi Arabia on oil production.

In Toronto, Canadian Natural Resources gave back $1.41 to $102.11 and EnCana slipped $1.47 to $90.59.

The base metals sector dropped 2.2% with Teck Cominco $1.58 lower with $47.66.

After markets closed, the Supreme Court of Canada ruled it will allow the $52 billion buyout of BCE Inc. by a group of investors headed by the Ontario Teachers’ Pension Plan to go ahead.

The court’s decision overturned a May 21 Quebec Court of Appeal ruling that effectively killed the deal by ordering the company to consider the interests of bondholders.

The legal case pitted the company, buyers and stockholders, who were enthusiastic about the $42.75-a-share offer, against owners of BCE debentures, whose holdings fell in value because the deal would load BCE with $34 billion in debt.

The ruling, another step in determining the fate of what has been called the largest leveraged buyout in Canadian history, also clarified the legal rules directors must follow in considering the needs of stockholders and bondholders in a takeover.

However, it doesn’t mean the deal is out of the woods, because the bankers who agreed to provide financing last year may be rethinking their position in light of the turmoil in credit markets. There is a June 30 deadline facing Teachers and its U.S. partners, private equity firms Providence Equity Partners Inc., Madison Dearborn Partners, and Merrill Lynch Global Private Equity. After that date, the buyout consortium is free to walk away without paying any penalty.

The S&P/TSX Venture composite index added 2.9 points, or 0.11% to 2,616.31.

The Canadian dollar closed down 0.17 cent to US98.33¢, after Statistics Canada reported that retail sales rose 0.6% in April to $35.6 billion.

In New York, U.S. stocks fell sharply with the Dow closing below 12,000 for the first time since mid-March as rising oil prices and warnings of more mortgage-related write-downs at banks reignited investor fears of worse to come.

The Dow Jones industrials fell 220.4 points, or 1.83% to 11,842.69.

The tech-heavy Nasdaq composite index lost 55.97 points, or 2.27%, to 2,406.09, while the S&P 500 index fell 24.9 points, or 1.85%, to 1,317.93.