Toronto stocks plunged Tuesday, as investors continued to rush out of commodities, in particular gold, as the U.S. dollar rebounds and as pessimism over the prospects of the global economy grows. U.S. markets were also down on expectations interest rates were headed up.

The S&P/TSX composite index dropped 293.24, or 2.62%, to 10,904.34. After spending most of the year in positive territory, the index is now at its lowest point since early December 2005.

It was the biggest one-day drop in the TSX since a 300-point plunge on April 28, 2004.

The TSX has now lost almost 1,000 points in the last seven trading sessions — about 8.4% of its value.

All10 TSX main sub-groups were down and the gold sector, a sub-set of materials, moved down 3.09%.

Gold for August delivery ended down $44.50, or 7.3% at US$566.80 an ounce.

Goldcorp Inc. fell 32¢, or 1.15%, to $27.60.

The energy index lost 4.00%

July crude futures shed $1.80 to end at US$68.56 a barrel.

Connacher Oil and Gas Inc. gave up 35¢, or 9.80%, to $3.22.

The financials sector was off 2.33%, while the information technology index lost 1.92%.

The Canadian dollar dropped 1.18 cents to US89.87¢ on the strength of the U.S. dollar against world currencies.

The S&P/TSX Venture composite index sank 194.26 points, or 7.62%, to 2,354.77, as investors fled the resource-heavy junior bourse.

In New York, the Dow industrials were down 86.44 points at 10,706.14. The Nasdaq fell 18.85 points to 2,072.47, while the S&P 500 Index was down 12.71 points at 1,223.69