The lofty Canadian dollar flew lower for the third day in a row Friday, and North American stock markets endured big sell-offs as investors backed away from risk.

The loonie fell more than three-quarters of a cent to close at $1.0607 US. It's dropped four full cents from its modern-day high on Wednesday morning just above $1.10 US.

Weekly losses
Index	%
S&P/TSX composite	-3.44
Dow Jones industrial average	-4.06
Nasdaq composite	-6.49

In after-hours trading, the loonie sank further to just below $1.06 US.

A morning report that Canada's September trade surplus came in much lower than the market expected set an early negative tone for the dollar.

The S&P/TSX composite index dropped 258.77 points to 13,869.82. The benchmark index has dropped almost 500 points in the last week.

Financials, energy and IT were the biggest losing sectors in a day that saw broad-based declines.

Bank stocks fell as investors continued to worry about writedowns from credit market losses. CIBC, which disclosed Friday it would take a $463-million charge on exposure to the U.S. subprime market, actually had the smallest loss — just nine cents to $96.24. The bank said loss would be more than offset by a gain on the restructuring of VISA International.   

Shares of BMO dropped almost five per cent to a new 52-week low of $56.52. BMO may report a $100-million writedown on its investments in non-bank asset-backed commercial paper, Bloomberg reported.

Research in Motion shares — which have more than doubled in the last year — led a big sell-off in the technology sector. RIM's stock plunged $10.34 to $106.76. The shares had dropped more than $6 on Thursday.

On Wednesday, Cisco Systems issued a negative outlook for 2008 and "referred specifically to weakness in financial companies," Laura Wallace, managing director of Coleford Investment Management, told CBC News. "That's a big area of strength for RIM," she said.

Goldcorp reported a higher third-quarter profit, but it missed the estimates of analysts as higher costs and a higher Canadian dollar mitigated the benefit from higher gold prices. Goldcorp shares fell 86 cents to $32.82.

Canada's biggest toymaker — Montreal-based Mega Brands — saw its shares plunge by a third (down $5.10 to $9.95) as it reported an unexpected $11-million third-quarter loss following recalls and lower sales.  

The Dow Jones industrial average slumped 223.55 points to 13,042.74. The Dow lost 4.1 per cent on the week.

The tech-heavy Nasdaq composite index fell 6.49 per cent on the week. It lost more than 68 points Friday to end the week at 2627.94.