The Toronto Stock Exchange backed away from the previous day’s gains to shed more than 1% on Tuesday, dragged lower by energy stocks.

The S&P/TSX composite index dropped 109.12 points, or 1.2%, to close at 8,849.39.

The energy group gave up 2.7% as oil futures finished the day lower. On the New York Mercantile Exchange, crude for May delivery ended down US$0.18, or 0.3%, at US$53.98 a barrel.

Shares of Suncor Energy Inc. plummeted 7.3% a day after news that the oil company would acquire Petro-Canada. Suncor shares dropped $2.24 to close at $28.50.

Petro-Canada shares shed 4.7% after Monday’s 20% jump. The stock closed at $34.01, down $1.69.

Canadian Natural Resources Ltd. fell 3.4% to $51.18.

Higher for the day was Niko Resources Ltd., up 3.4% to $57.17.

Financial stocks also retreated to finish the day down 2%.

Manulife Financial Corp. shares fell 5% to $15.44 and National Bank of Canada dropped $2.21, or 4.9%, to $42.97.

Toronto-Dominion Bank shares dipped $1.77, or 3.9%, to $43.73.

Also lower was Sun Life Financial Inc., down 3.4% to $23.06.

The materials group dipped 0.3% on Tuesday as gold futures dropped. Gold for April delivery fell US$28.70, or 3%, to end at US$923.80 an ounce on the Comex division of the New York Mercantile Exchange.

The sub-gold index fell 1.2%.

Barrick Gold Corp. shed 2.5% to $39.52 and Inmet Mining Corp. retreated 3.8% to $34.15.

Higher for the day was Potash Corp., up 1.7% to $103.06, and Kinross Gold Corp., up 1.5% to $22.63.

Junior companies on the TSX Venture Exchange finished the day flat. The S&P/TSX Venture composite index edged up just 0.26 points to close at 924.29.

The Canadian dollar slipped US0.62¢ to close at US81.18¢.

In New York, news that the U.S. government was calling for more regulatory oversight of financial firms sent equities lower.

The Dow Jones industrial average fell 115.49 points, or 1.5%, to close at 7,660.37.

The S&P 500 index shed 16.49 points, or 2%, to stand at 806.43.

The Nasdaq composite dropped 37.12 points, or 2.4%, to 1,518.65.