North American stock markets tumbled sharply lower on Tuesday, as a weekend meeting of G-7 finance ministers and central bankers failed to improve investor confidence through the deepening global recession.

The S&P/TSX composite index dropped 299.4 points, or 3.5%, to close at 8,378.7.

Crude oil for March delivery was slammed during Tuesday’s session, falling US$2.58, or 7%, to end at US$34.93 a barrel on the New York Mercantile Exchange.

This pulled the energy group lower by 5%.

Within the group, shares of Suncor Energy Inc. tumbled 7% to $22.82 and Nexen Inc. fell 5.8% to $16.49.

Canadian Natural Resources Ltd. retreated 6% to $39.99 and Petro-Canada shares fell 4.4% to $27.30.

Also sharply lower was EnCana Corp., down 5.2% to $51.30, and Talisman Energy Inc., off 4.2% to $11.55.

Financial stocks suffered even greater damage on Tuesday, falling 6.4%.

Shares of Manulife Financial Corp. plunged $1.86, or 10.6%, to $15.67.

Bank of Nova Scotia’s stock shed $2.32, or 7.9%, to $27.00 and Toronto-Dominion Bank shares slid 5% to $35.31.

Other bank stocks also took a swipe, including of Royal Bank of Canada, down 5.5% to $28.15, and Bank of Montreal, lower by 5.6% to $28.08.

Materials stocks comprised the only major group on the TSX that finished the day in positive territory, finishing up 0.5%.

Bolstering the group was a surge in gold futures as nervous investors flocked to the safe haven amid deterioration in financial stocks. Gold for February delivery rose US$25.50, or 2.7%, to end at US$967 an ounce on the Comex division of the New York Mercantile Exchange—the highest closing level for a front-month contract since July.

The sub-gold index gained 4.6%.

Shares of Yamana Gold Inc. advanced $0.85, or 7.7%, to $11.92.

Iamgold Corp. surged $1.23, or 12.6%, to $10.98, and Goldcorp Inc. shares rose 3.4% to $40.45.

Shares of uranium miner Cameco Corp. fell 5.4% after the company reported on the weekend that net earnings for the fourth quarter fell to $31 million, down from $61 million in the fourth quarter of 2007. Cameco shares fell $1.03 to $18.17.

Other materials companies retreated, including Potash Corp., down 7% to $98.87 and Teck Cominco Ltd., down 9.8% to $4.44.

Research In Motion Ltd. continued to weigh on the TSX, losing $3.51, or 5.9%, to $56.54. The company announced Tuesday that its executives have settled allegations of stock option back dating with the U.S. Securities and Exchange Commission.

The S&P/TSX Venture Exchange erased early-day gains to finish the day at 919.16, down 6.48 points, or 0.7%.

The Canadian dollar fell more than a cent on Tuesday, shedding US1.27¢ to close at US79.13¢.

Global economic concerns also dragged down stock markets south of the border, despite the massive US$787 stimulus package being signed by U.S. President Barack Obama on Tuesday.

The Dow Jones industrial average shed 297.81 points, or 3.8%, to end at 7,552.6.

The S&P 500 index dropped 37.67 points, or 4.6%, to 789.17.

The Nasdaq composite index fell 63.7 points, or 4.2%, to close at 1,470.66.

Shares of General Motors Corp. tumbled 12.8% to US$2.18 on the New York Stock Exchange as the company raced to submit a recovery plan to the U.S. government, in order to receive billions of dollars in loans.