Economic worries in the United States and fallout from the U.S. mortgage market sent stock indices tumbling on Tuesday.

The S&P/TSX composite index finished with a loss of 381.50 points, or 2.8 per cent, at 13,316.78. It was the biggest one-day point loss in more than five months.

Every sector was in negative territory, but the decline was led by falls of more than three per cent in the energy, gold, mining and materials groups.

The energy sell-off came hand-in-hand with a sharp slide in the price of oil — down $2.30 to $91.90 US a barrel.

The price of gold was off 80 cents at $902.60 US an ounce as investors took profits after the metal's recent runup.

The TSX financial sector was also a big loser, sliding 2.3 per cent. Shares of CIBC fell $2.07 to end at $70 after it said it would issue $2.75 billion in new stock to help its balance sheet following writedowns of more than $2.4 billion due to the slumping U.S. mortgage market.

On Wall Street, a big loss at Citigroup pulled the Dow Jones industrial average down. The Dow shed 277.04 points to end at 12,501.11. All 30 stocks in the industrial average of blue-chip equities lost ground on Tuesday.

Citigroup, the largest financial services company south of the border, fell $2.12 US to settle at $26.94 after posting a fourth-quarter loss of $9.83 billion US. The big loss included an $18.1-billion US writedown as it cut the value of bonds and debt backed by mortgages.

The Nasdaq composite index dropped 60.71 points to end at 2417.59.

A weak December retail report in the United States was the main source for Tuesday's market anxiety. Sales were down 0.4 per cent in the month, much worse than analysts had expected.

Consumer spending accounts for about two-thirds of all economic activity, meaning belt-tightening by consumers could translate into an economic slowdown.