The benchmark index of the Toronto Stock Exchange tumbled on Monday as commodity prices dropped and the Bank of Canada warned that an economic recovery could take longer than expected.

The S&P/TSX composite index dropped 250.18 points, or 2.4%, to close at 10,394.78.

In the Bank of Canada’s semi-annual Financial System Review, released on Monday, it warned that the global financial system remains under significant stress, and said the economic outlook faces considerable uncertainty.

The energy group on the TSX took a hefty hit, tumbling 3.4% as oil futures retreated. Crude oil for July delivery ended down US$1.42 at US$70.62 a barrel on the New York Mercantile Exchange.

Shares of Suncor Energy Inc. dropped 4.1% to $37.47 and Canadian Natural Resources Ltd. dipped 3.6% to $62.40.

Petro-Canada finished at $47.27, down $2.06, or 4.2%.

Also lower was EnCana Corp., down 2.7% to $60.34 and Nexen Inc., off 4.3% to $26.78.

The materials group also finished sharply lower, shedding 2.8% as gold futures fell. On the Comex division of the New York Mercantile Exchange, August gold fell US$13.20, or 1.4%, to US$927.50 an ounce.

The sub-gold index finished down 1.9%.

Shares of Teck Resources Ltd. slipped 4.6% to $19.40 and Inmet Mining Corp. plummeted $3.18, or 7.2%, to $41.20.

First Quantum Minerals Ltd. dropped $2.32, or 4.1%, to $54.76.

Also lower was Potash Corp., down 2.8% to $126.05, and Agrium Inc., down 2.2% to $54.55.

Financial stocks fell 1.6% on Monday.

Shares of Sun Life Financial Inc. fell 1.3% after the company announced that it is acquiring the U.K. operations of Lincoln National Corp. for $359 million. Sun Life shares lost 39 cents to close at $31.01.

Manulife Financial Corp. fell 3.2% to $23.48 and National Bank of Canada slipped 2.5% to $53.42.

Bank of Nova Scotia shares slipped 1.5% to $40.03.

Junior stocks also retreated, sending the S&P/TSX Venture composite index down 21.86 points, or 1.9%, to 1,132.95.

The Canadian dollar took a hit of its own on Monday, shedding more than a cent to close at US88.31¢.

In New York, U.S. stocks also finished sharply lower on Monday after a discouraging report on New York-area manufacturing. The U.S. Federal Reserve Bank of New York’s Empire State Manufacturing Survey declined in May as new orders remained weak and a gauge of shipments declined sharply.

The Dow Jones industrial average fell 187.13 points, or 2.1%, to end at 8,612.13. It was the Dow’s first drop in three days.

The S&P 500 index fell 22.49 points, or 2.4%, to 923.72.

The Nasdaq composite index lost 42.42 points, or 2.3%, to end at 1,816.38.

IE