The benchmark index of the Toronto Stock Exchange tumbled to a triple-digit loss for a second consecutive day on Tuesday, led by a plunge in financial sector stocks.

The S&P/TSX composite index dropped 178.43 points, or 1.6%, to end at 10,689.78.

The financials group fell by 2.9% as investors questioned the sustainability of a recent rally in the sector’s shares.

Shares of Bank of Nova Scotia plunged $1.94, or 4.2%, to $43.92, and CIBC dropped 4.6% to $61.29.

Bank of Montreal’s stock finished at $51.04, down $1.96, or 3.7%.

Insurance companies also saw their stocks take a hit, including a 4.1% drop for Sun Life Financial Inc., which closed at $31.07, and a 3.7% dip in shares of Manulife Financial Corp., which closed at $21.70.

The energy finished down 1.5% as oil futures continued to decline. Crude for October delivery finished down US$1.91, or 2.7%, to $68.05 a barrel on the New York Mercantile Exchange.

Shares of EnCana Corp. fell $1.41, or 2.5%, to $55.65.

Nexen Inc. retreated by 3.1% to $20.84, and Niko Resources Ltd. shed $1.33, or 1.9%, to end at $69.67.

The sub-gold index and the materials group each fell by 0.7% despite a small boost in gold futures during Tuesday’s trading. On the Comex division of the New York Mercantile Exchange, December gold futures gained US$3.00, or 0.3%, to end at US$956.50 an ounce.

Iamgold Corp. fell 2.7% to $12.38 and Red Back Mining Inc. fell 4.1% to $10.91.

Other gold industry stocks advanced, including Barrick Gold Corp., up 2.3% to $38.64.

Shares of Agrium Inc. fell 2% to $51.33 and Teck Resources Ltd. declined by 3.4% to close at $25.51.

The information technology sector was the only major group on the TSX to advance on Tuesday, edging up 0.7%. Shares of Research in Motion Ltd. gained 1.1% to $81.21.

Junior stocks on the junior TSX Venture Exchange also retreated on Tuesday, pulling the S&P/TSX Venture composite index down 12 points, or 1%, to 1,163.24.

The Canadian dollar dropped by three quarters of a cent to close at US90.57¢.

U.S. stocks also finished sharply lower on Tuesday, despite the release of new data showing that the U.S. manufacturing sector grew in August after shrinking for 18 straight months.

The Dow Jones industrial average plummeted 185.68 points, or 2%, to finish at 9,310.60.

The S&P 500 index fell 22.58 points, or 2.2%, to end at 998.04.

The Nasdaq composite index shed 40.17 points, or 2%, to close at 1,968.89.

IE