Toronto stocks dropped Tuesday, as investors reacted to a significant slide in the price of crude oil.

The S&P/TSX composite index finished down 120.57, or 1.09%, to 10,960.62.

Volume on the senior exchange was 310 million shares.

Light, sweet crude for November delivery settled at US$63.90, down $1.57, on the New York Mercantile Exchange. The energy sector shed 3.35%

EnCana Corp. fell $2.63, or 3.79%, to $66.85, while Petro Canada gave back $1.79, or 3.57%, to $48.41.

PetroKazakhstan Inc. fell 50¢, or 0.92%, to $54.02. A Kazakhstan government minister said the country will try to acquire a part of the energy firm.

The financials sector lost 0.74%.

CI Fund Management lost 62¢, or 2.85%, to $21.15, while Sun Life Financial lost 46¢, or 1.05%, to $43.33.

Sears Canada gained 46¢, or 1.38%, to $33.71after it said it would cut 1,200 jobs to refocus on its core department store business.

The Canadian dollar closed down 0.54 of a cent at US85.32¢.

The junior S&P/TSX venture exchange finished down 4.29, or 0.20%, to 2,170.63.

In New York, investors continued to be concerned over inflationary pressures and the Federal Reserve continuing to raise interest rates.

The Dow Jones industrial average fell 94.37, or 0.9%, to 10,441.11, the S&P500 index lost 12.23, or 1%, to 1,214.47, and the Nasdaq composite index dropped 16.07, or 0.75%, to 2,139.36.

In U.S. economic news, factory orders in August were up 2.5%.