Stocks in Toronto continued their descent on Tuesday, plunging past the 10,000 mark as concerns over the credit crunch continued to be top of mind for investors.

The S&P/TSX composite index fell 400.88 points, or 3.92%, to close at 9,829.55.

The drop was led by a 6% drop for the energy group, despite the first gain for oil futures in five days. Crude for November delivery was up US$2.25, or 2.6%, to close at $US90.06 a barrel on the New York Mercantile Exchange.

Hefty drops in the energy group included a decline of $4.03, or 7.17%, for shares of Encana Corp., which closed at $52.17, and a 7.28% drop for units of Crescent Point Energy Trust, which finished at $23.93.

Financial stocks in Toronto weathered a 4.36% drop, led by an $18.33 decline for Fairfax Financial Holdings Ltd. shares, which closed at $323.67.

RBC Capital Markets’ move to cut its price targets on several financial institutions sent those firms’ shares tumbling, including a 3% drop for Bank of Montreal shares, which closed at $39, and a 3.6% decline for CIBC shares, which closed at $54.71.

Royal Bank of Canada shares lost 5.78% to finish the day at $45.13.

The materials index managed a 0.18% gain, led by gold companies that got a boost from continued growth in gold futures. Gold for December delivery rose US$15.80, or 1.8%, to end at US$882 an ounce on the Comex division of the New York Mercantile Exchange. The subgold index rose 1.24%.

Goldcorp Inc. shares rose $1.85, or 6.86% to close at $28.83, and Barrick Gold Corp. shares gained $0.87, or 2.65%, finishing at $33.67.

It was a rough day for other materials companies, including First Quantum Minerals Ltd., whose shares plummeted $5.69, or 17.41% to close at $27. Shares of Inmet Mining Corp. also took a hit, dropping $4.78, or 11.64%, to close at $36.27.

The Canadian dollar slid more than half a cent, closing at US90.31¢.

The TSX Venture lost 39.64 points, or 3.5%, to close at 1,094.46.

Markets in New York were also down Tuesday as U.S. Federal Reserve Board chairman Ben Bernanke said the outlook for economic growth had worsened, and hinted that more interest rate cuts could be in store.

The S&P 500 finished the day at a five-year low, down 60.66 points, or 5.74%, at 996.23. The Dow Jones industrial average lost 508 points, or 5.1%, to close at 9,447.11. The Nasdaq composite index fell 108.08 points, or 5.8%, to close at 1,754.88.