The S&P/TSX composite index fell more than 400 points Tuesday as North American stock markets retreated amid concerns over commodity prices, the subprime housing market and corporate earnings.

The TSX was off 2.8 per cent to finish at 14,068.16 points.

Every sector sub-index on the TSX was down, led by a decline of 4.4 per cent in the mining subgroup and a drop of 3.9 per cent in the energy sector. The information technology, industrials and materials groups all fell more than three per cent.

Pulling energy stocks lower was a retreat in the price of oil. Light, sweet crude for September delivery settled down $1.33, at $73.56 US a barrel.

Some market watchers were not overly surprised to see a sell-off given the recent performance of equities. The TSX was up 13 per cent year-to-date at the start of this week.

"Taking some profit like this is to be expected — call it a mini-correction, call it what you want, these are expectations that should be built into the plan of action," said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver.

"And anybody that cannot take this sort of thing should not be in the markets."

On U.S. markets, the Dow Jones Industrial Average lost more than 226 points, or 1.6 per cent, to end at 13,716.95. The Nasdaq fell 50.72 points to end at 2,639.86.

Jitters over the subprime mortgage sector were compounded after Countrywide Financial Corp. — the largest U.S. mortgage lender — said its profits fell sharply as mortgage banking earnings tumbled. The company also cut its profit outlook amid rising mortgage delinquencies.

With files from the Canadian Press