Pedestrians in Toronto pass an illuminated sign on King Street tracking TSX performance. (Robin Rowland/CBC)Toronto's most-watched stock index lost another 400 points Tuesday — and New York's dropped more than 500 — as eyes turned to central bank efforts to ease a credit crisis and head off an economic slump.

In Toronto, the S&P/TSX composite index traced a zigzag downward course after a scary day on Monday and an early rally on Tuesday. It was up as many as 292 points, then down as many as 447.

It closed down 400.88, or 3.9 per cent, at 9,829.55.

It had fallen below 10,000 Monday for the first time since 2005.

The signals from the market were mixed. The only major groups holding their heads above water were gold stocks, often seen as a refuge when paper assets are losing value, and materials stocks that stand to gain from economic growth.

Among golds, Agnico Eagle was up $2.25, or 4.7 per cent at $50.25; Barrick was up 87 cents, or 2.65 per cent, at $33.67; and Goldcorp was up $1.85, or 6.9 per cent, at $28.83.

Among materials stocks, big fertilizer producers initially looked strong but gave up most of their early gains.

S&P/TSX composite index Saskatoon-based PotashCorp, closed up $1.67, or 1.75 per cent, at $96.92, and Calgary-based Agrium closed down 89 cents, or 2.1 per cent, at $42.11. Both were hammered last week when Merrill Lynch pulled a "buy" recommendation.

New York's Dow Jones Industrial average — which fell below 10,000 Monday for the first time since 2004 — moved in Tuesday's trading between a gain of 168 points and a loss of 519. It closed down 508.39, or 5.1 per cent, at 9,447.11.

The price of oil was near $89.15 US a barrel in late-afternoon trading after bouncing above $93 and below $88 earlier, suggesting continued worry that economic problems could reduce demand.

There was talk of interest rate cuts by central banks, and the U.S. Federal Reserve said it would take the novel step of buying short-term corporate IOUs called commercial paper to make it easier for businesses to raise money.