The Toronto Stock Exchange’s main index fell sharply Tuesday as energy stocks stumbled amid a retreat in crude oil prices.

The S&P/TSX composite index dropped 85.57 points, or 0.58%, to finish at 14,728.61.

Crude for July delivery fell US$3.45, or 2.7%, to finish at US$124.31 a barrel on the New York Mercantile Exchange.

The TSX energy sector fell 1.34% as Suncor Energy shed $2.18 to $66.60 and Imperial Oil moved $1.49 lower to $58.11.

The financials group was down 0.17% as TD Bank fell $1.05 to $69.90 and CIBC dropped 72¢ to $68.11.

Gold futures fell US$11.50 an ounce to finish at US$885.50.

The drop in bullion prices pushed he TSX gold sector down 1.5% as Kinross Gold fell 47¢ to $19.65.

In individual stocks, BCE Inc. was 5¢ higher to $34.60 after the Supreme Court of Canada agreed to hear an appeal of a Quebec court ruling that threw the $52 billion takeover of Canada’s biggest telecom company into doubt.

The junior S&P/TSX Venture composite index slipped 11.79 points, or 0.44%, to 2,640.10

The Canadian dollar closed at US100.86, up from Monday’s close of US100.12¢.

In New York, U.S. stocks fell for a second day after a report that Lehman Brothers may have to raise more capital compounded recent worries the financial sector faces another round of big losses from the credit crisis.

The Dow Jones industrial average fell 100.97 points, or 0.81%, to 12,402.85. The S&P 500 shed 8.02 points, or 0.58%, to 1,377.65. The tech-heavy Nasdaq composite index dropped 11.05 points, or 0.44%, to 2,480.48.