Falling gold and energy prices continued to plague Bay Street, sending the S&P/TSX to a second-consecutive triple-digit loss, while Wall Street failed to sustain early momentum from better-than-expected economic news that temporarily helped offset renewed concerns about inflation.

At close, the S&P/TSX composite index was off 121.93 points or 1.33% at 9021.05, while the TSX Venture Exchange fell 22.16 points or 1.24% to 1765.46. Volume on the S&P/TSX was 246.5 million shares.

The Dow Jones industrial average slid into the red late in the last half-hour of trading, finishing down 32.95 points or 0.31% at 10597.83, while the Nasdaq composite index slid 16.62 points or 0.79% lower at 2091.24, while the Standard & Poor’s 500 index lost 4.31 points or 0.36% at 1183.74.

The Canadian dollar was down 0.19¢, to US81.59¢.

In Toronto, energy and mining shares were hit by declining oil and gold prices. Gold futures logged a three-session loss of $11.10 an ounce in New York, with the February contract falling $1.90 to close at US$427.30. Crude-oil futures, meanwhile, traded lower after the U.S. Energy Department reported a rise in weekly supplies of distillates, which include heating oil. Crude for February delivery was last down 52¢ at US$43.39 a barrel after climbing more than 4% in the prior session after Saudi Arabia said that it would proceed with a previously announced cut in production.

On the TSX, the heavily weighted gold sub-index slid 0.87% while the mining and materials sub-indi9cers were off 3.85% and 2.55%, respectively. Among the bigger losers: Barrick Gold Corp., down 1.14% to $27.69 and Cameco Corp., off 7.05% to $38.22.

Energy shares fell 1.86% as a group, with Petro-Canada (down 1.75% to $59.10), Encana Corp. (off 2.1% to $65.20) and Suncor Energy Inc. (down 1.65% to $39.44) among bigger losers.

Across the TSX only one sub-group, telecommunications services, was in the black, up 0.60%. It was helped by BCE Inc., whose shares jumped 0.48% to $29.20.

On Wall Street, stocks got an early boost after a key report showed a surprise expansion in the non-manufacturing sectors of the economy. The Institute of Supply Management’s non-manufacturing index rose to 63.1% from 61.3% in November. Economists had been looking for a pullback to 60.8%.

But Wall Street’s 2005 slump extended into a third session as renewed concerns about inflation and higher interest rates sapped confidence from buyers.

Investors were still digesting the latest news from the Federal Reserve’s Open Market Committee, which sent stocks tumbling Tuesday when it released the minutes of its Dec. 14 meeting.

Meanwhile, oil prices also took their toll on U.S. stocks. The American Petroleum Institute confirmed increases in distillate and gasoline inventories, reporting a 4.6 million barrel increase in the former and a 4.1 million barrel build in the latter. The API said crude supplies fell by 9.2 million barrels.

In the energy sector, the Amex Oil Index eased 0.4% to close at 691.91 with shares of Dow component Exxon Mobil Corp. closing at US$49.49, off 26¢. ChevronTexaco shares gained 33¢ to close at $50.88. The company said that the Bomboco field in Angola, expected to reach daily production of 30,000 barrels within a year, has achieved first-oil status.

Delta Air Lines Inc. was down 7% at US$6.80, after the carrier said it was cutting domestic fares by up to 50% and scrapping its unpopular Saturday-stay requirement in a move to lure back customers. The airline’s SimpliFares plan comes as Delta fights to stay out of bankruptcy.

Among retailers, Nordstrom Inc. was up $1.44 at US$47.06 after saying December sales rose a better than expected 9.3%. Despite the strong sales, company executives said in a conference call they were comfortable with their current forecast for the fourth-quarter.

Circuit City Stores Inc. slid 8.4% to US$13.71, after reporting disappointing sales for December. The company said its consumer electronics stores were operating efficiently, but holiday customer traffic was down.

Xilinx Inc. shed 90¢ to US$27.54 after lowering its third-quarter sales forecast, saying it expects an 11% to 12% decline due to lower bookings and shipments. Siebel Systems Inc. shed 27¢ to US$9.61 despite saying it expects fourth-quarter results to beat Wall Street expectations based on improvements in profitability and all revenue categories.

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