Stock markets fell sharply Monday after chief UN weapons inspector Hans Blix briefed the UN Security Council on his investigation in Iraq. The S&P/TSX Composite Index fell 108.38 points to finish at 6,556.52.

Blix gave Iraq good marks for being quick in allowing access at sites inspectors have chosen to visit, but he complained that the Iraqis need to do more to help out.

All 13 TSX sectors closed lower, led by a 3.62% drop in the information technology group, and a 1.72% drop in the financial services group.

Gold stocks, usually a safe haven for investors during troubled times, closed down 2.66%. Gold shares fell even as spot gold prices moved above the US$370-an-ounce level for the first time in six years. Barrick Gold lost $1.04 to $24.96.

Among actively traded issurs Nortel Networks closed 27¢ lower at $3.62. Bombardier fell 17¢ to $5.43

Manulife Financial weighed on financial stocks, dropping 93¢ to $34.06. Scotiabank slipped 85¢ to $50.15

Dundee Bancorp announced plans to acquire all of its Dundee Realty property subsidiary and spin it off into an investment trust. Dundee Bancorp finished up 28¢ to $13.26, while Dundee Realty soared $4.45 to $20.55.

Air Canada slipped 19¢ to $3.85 after it decided to sell 35% of its Aeroplan frequent flyer program to Onex Corp. Onex shares slid 13¢ to $16.02.

Royal Group Technologies shares fell another $1 to $12.01 after two more brokerage houses lowered their targets for the company.

TSX declines beat advances 766 to 358, on volume of 204 million shares worth $2.34 billion.

The TSX Venture Exchange declined 11.85 to 1,117.96.

In New York, the Dow Jones industrial average slumped below the 8,000 line, falling 141.45 points to 7,989.56. The Nasdaq composite index fell 16.80 points to 1,325.30. The S&P 500 lost 13.93 points to 847.48.

The Canadian dollar dropped 0.27¢ to US65.59¢, while the American dollar fell against other major currencies.