North American stocks dropped Friday, as investor nervousness over rising interest rates globally led to losses across the broader market.

The S&P/TSX composite index fell 109.70, or 0.78%, to 13,986.03.

All 10 TSX main sub-groups were down.

The energy index fell 0.99%.

Light, sweet crude gained 49¢ to close at US$69.14 a barrel.

EnCana Corp. fell 81¢, or 1.14%, to $70.05.

The materials group declined 0.92%, while the gold sub-index fell 0.79%.

Gold futures gained $2.80 to close at US$657 an ounce.

Goldcorp Inc. fell 8¢, or 0.31%, to $26.11.

Industrials lost 1.19%.

CN Railway Co. lost $1.68, or 2.99%, to 54.55.

BCE Inc. was in the spotlight after Catalyst Asset Management, an investment banking and advisory firm, said it would propose a takeover bid that would change the capitalization of BCE, but not Canadian ownership and control .

Shares of BCE slipped 23¢, or 0.6%, to $40.51.

Shares of ACE Aviation Holdings Inc., the parent of repair and overhaul subsidiary ACTS LP, rose 54¢, or 2%, to $27.01 after ACE announced it is selling a 70% interest in the division to a consortium that includes Kohlberg Kravis Roberts and Co.

The S&P TSX Venture Exchange lost 16.27, or 0.50%, to 3,235.09.

The Canadian dollar gained 0.44 of a cent to US93.49¢.

In New York, wrapped up their worst week since February amid fears that trouble at two Bear Stearns hedge funds may signal worse problems lie ahead for credit markets.

Efforts by Bear Stearns Cos. to rescue one of two ailing hedge funds with steep losses on subprime mortgage bonds focused attention on troubles in the sector.

The Dow Jones industrial average lost 185.58, or 1.37%, to 13,360.26, the Nasdaq composite index fell 28.00, or 1.07%, to 2,588.96, and the S&P 00 declined 19.63, or 1.29%, to 1,502.56.

For the week, the Dow lost 2.1%, the S&P shed 2% and the Nasdaq slipped 1.4%.