The S&P/TSX index over a month

The benchmark TSX index took a record dive Monday, dropping 864.41 points, or 9.3 per cent, to 8,406.21.

The percentage drop was the second-biggest on record, after the 11.3 per cent plunge on Black Monday, Oct. 19, 1987. The TSX point fall broke the record set on Sept. 29, when it fell by 840.93 points.

The Dow Jones industrial average also plummeted, falling 679.95 points, or 7.7 per cent, to 8,149.

There was more bad economic news from the U.S., with reports on more weakness in manufacturing, drops in construction spending and uncertainty about the willingness of U.S. consumers to spend for the holidays. Investors had been hoping for a surge.

In Toronto, the biggest percentage drop was in diversified metals, but the energy, real estate, materials and gold sub-indexes were close behind, all falling more than nine per cent. The financial sub-index, including banks and insurance companies, dropped almost seven per cent.

The bigger percentage drop in the TSX may reflect the Toronto exchange's greater exposure to commodities, although there was speculation that a possible Liberal-NDP coalition government was a factor.

The price of a barrel of light crude oil fell $5.15 US to $49.28. The drop followed a weekend decision by the OPEC cartel to delay announcing new cuts in oil production in response to low prices.

The drops Monday followed a week when the markets rebounded. The S&P/TSX index jumped almost 14 per cent last week through the 9,000 level, but the loss Monday wiped out most of the gain.

With files from the Canadian Press