The Toronto Stock Exchange dropped more than 3% in trading on Wednesday, as plummeting commodity prices continued to take a toll on the materials-heavy exchange.

The S&P/TSX composite index fell 273.19 points, or 3.05%, to close at 8,688.36. All 10 main groups, except for the consumer staples group, finished the day in the red.

Materials companies dropped a hefty 4.5% and the diversified metals group suffered an even sharper 9.7% decline as gold futures slid to their lowest level in more than a month. Gold for February delivery ended down US$11.90, or 1.4%, at US$808.80 an ounce on the Comex division of the New York Mercantile Exchange.

The sub-gold index dipped 2.8%.

First Quantum Minerals Ltd. saw its shares fall $2.31, or 9.9%, to close at $20.98 and Agnico-Eagle Mines Ltd. fell $2.02, or 3.5%, to $56.22.

Yamana Gold Inc. dropped 6.4% to $7.44 and Kinross Gold Corp. shares fell 4.4% to $20.25.

Shares of Inmet Mining Corp. tumbled $2.75, or 11.6%, to $20.95, and Teck Cominco Ltd. saw its B-class shares plunge 12.9% to $5.73.

Also down was Potash Corp., lower by 6.2% to $87.67, and Agrium Inc., down 4.7% to $38.41.

Energy companies took a dive of their own, ending down 3.5% as oil futures dipped lower. Crude for February delivery fell 50 cents, or 1.3%, to end at US$37.28 a barrel on the New York Mercantile Exchange.

The drop was led by Suncor Energy Inc., down 6.2% to $25.78 and Petro-Canada, down 6.6% to $28.68.

Imperial Oil Ltd. shares fell 3.6% to $38.99 and Addax Petroleum Corp. was down 7.4% to $19.36.

The financials group slipped 3% on Wednesday.

This included a 3.4% dip for shares of Bank of Nova Scotia, which closed at $30.65.

National Bank of Canada shares fell 4.2% to $33.25 and Sun Life Financial Inc. was down 3.6% to $26.46.

Also lower were shares of Onex Corp., down 4.5% to $18.10.

Shares of Nortel Networks tumbled 27¢, or 68.8%, to close at 12¢, after the telecommunications equipment manufacturer filed for bankruptcy protection from creditors on Wednesday.

Junior companies on the TSX Venture composite index declined 19.37 points, or 2.2%, to close at 849.53.

The loonie retreated another cent and a half against the American dollar, to end the day at US80.11¢.

Widespread stock market declines were prevalent south of the border too, as energy companies tumbled and the retail sector released more disappointing news.

In particular, jewelry retailer Tiffany & Co. again reduced its fiscal-year outlook after weak holiday sales. Its stock slipped 0.23% to US$21.95 on the New York Stock Exchange.

The Dow Jones industrial average descended 248.42 points, or 2.9%, at 8,200.14

The S&P 500 fell 29.17 points, or 3.4%, at 842.62.

The Nasdaq composite index closed down 56.82 points, or 3.7%, at 1,489.64.

IE