Worries over the European debt crisis pushed stock markets and oil and gold prices lower Tuesday.

Investors worried the $145.6-billion US aid package for Greece offered by the European Union and the International Monetary Fund "is still not enough to allay anything but short-term financing pressures," Vancouver-based Citizens Bank said in a commentary.

Traders work their posts on the trading floor of the New York Stock Exchange on Tuesday. Stocks plunged as fears grew that Europe's high-debt economies would default. (David Karp/Associated Press Photo)

"Greece is a big part of it," Beth Hamilton-Keen, portfolio manager with Calgary-based Mawer Investment Management, told CBC News.

"The Greece worries, of course, are expanding beyond that to … 'How are we going to deal with Spain, Italy, Portugal and Ireland?' There are fears about more credit downgrades out of Europe."

Hamilton-Keen said another factor weighing on markets was a reported slowdown in manufacturing demand in China.

Traders bought U.S. dollars as a perceived safe haven, pushing other currencies down. Commodities, most of which trade in U.S. dollars, fell in value and that bore on the commodities-heavy Toronto stock market.

'There's no other safe haven currency that you can choose from.'— Beth Hamilton-Keen, portfolio manager, Mawer Investment Management

"There's no other safe haven currency that you can choose from," Hamilton-Keen said.

The S&P/TSX composite index ended down 165.65 points, or more than one per cent, at 12,030.86, and the Canadian dollar's official close was 1.39 cents lower at 97.56 US.

The Dow Jones industrial average closed down 225.06 points, or 2.02 per cent, to 10,926.77. The Standard & Poor's 500 index lost 28.66 points, or 2.38 per cent, to 1,173.6, while the Nasdaq composite index ended down 74.49 points, or 2.98 per cent, to 2,424.25.

June oil on the New York Mercantile Exchange lost four per cent, closing down $3.45, to $82.74 US a barrel, also weighed down as traders bet that inventory numbers to be released by the U.S. Energy Department on Wednesday will show a buildup in stocks.

Oil touched an 18-month high of $87.15 US a barrel Monday and has jumped about 23 per cent since February on investor expectations that a growing U.S. and global economy will boost demand.

Investors looking for safety initially sent the June bullion contract on the New York Mercantile higher, but by the end of the day, it settled $14.10, lower at $1,168.60 US an ounce.

The euro hit its lowest level in a year, sliding to $1.300 US.

With files from The Canadian Press and The Associated Press