Toronto stocks fell sharply Tuesday led by a steep decline in technology shares. The S&P/TSX composite index closed down 158.45 points, or 2.4%, at 6,453.50.

Overal 12 of the TSX’s 13 sectors closed lower, led down by a 4.5% drop in the technology group a 2.5% declinein the financial index.

Technology issues fell after Lehman Brothers lowered its third-quarter revenue forecast for chip-maker Intel.

In Toronto ATI Technologies fell 73¢ to $8.42, while Nortel Networks gave up 13¢ to $1.55.

Financial issues slipped ahead of a widely expected interest rate hike by the Bank of Canada due tomorrow

Royal Bank of Canada fell $1.72 to $54.28, while Toronto-Dominion Bank closed down 96¢ at $33.60.

Only the gold sector managed to post gains, rising 2.98%.

Market momentum was negative as 734 issues declined and 332 advanced on a light volume of 120 million shares.

The TSX Venture Exchange retreated 7.17 points to 1,015.06.

The Dow Jones industrial average tumbled 355.45 points, or 4.1% to 8,308.05, while the Nasdaq composite index slipped 51.01 points, or 3.88%, to 1,263.84. The S&P 500 index gave up 38.05 points, or 4.1% , to 885.32.

Economic data from the United States, which showed paltry growth in the manufacturing sector, heightened concerns the U.S. economic recovery was stalling and dampened sentiment on both sides of the border.

The Canadian dollar closed up 0.27¢ at US64.42¢.