North American markets closed lower Monday as investors took a pessimistic view of any early resolution of Europe’s debt crisis.

The Toronto stock market lost ground as the price of crude oil — Canada’s number one commodity export – continued its slide.

The S&P/TSX was off 105.15 points at 11,330.39, led lower by information technology stocks, which fell 3.3 per cent.

The Canadian dollar was down 0.44 of a cent at 97.16 cents US.

August crude on the New York Mercantile Exchange was down 55 cents at $79.21 US a barrel. At one point it had dropped to nearly $78 per barrel.

Bullion for August delivery moved to the upside, up $21.50 at $1,588.40 US an ounce, while July copper was up three cents at $3.34 US a pound.

U.S. markets fell ahead of the European Union summit scheduled for later in the week and as Spain made its formal request for a loan to help clean up its troubled banking sector.

The Dow Jones average fell 138.12 points to 12,502.66, the Nasdaq lost 56.26 points to 2,836.16 and the S&P 500 slid 21.30 points to 1,313.72, despite a better-than-expected 7.6 per cent rise in U.S. new home sales in May.

Summit expectations modest

The leaders of France, Germany, Italy and Spain have agreed to push for a growth package of up to €130 billion ($167 billion Cdn) at the summit.

Investors, already worried about an economic slowdown in the U.S. and China, were preparing for the European leaders to disappoint at their gathering in Brussels that begins on Thursday.

Economists predicted the size of the growth package would be modest, about one per cent of the euro alliance's gross domestic product. But they said it marked a recognition by German Chancellor Angela Merkel that more government spending would be needed.

In Europe, the euro fell 0.58 per cent to $1.2497 US, and Britain's FTSE 100 closed down 1.05 per cent. Germany's DAX lost 2.09 per cent and France's CAC-40 fell 2.24 per cent.

Last week, markets took an ugly turn as reports showed a manufacturing slowdown in three of the world's largest economies — Europe, the U.S. and China — which dragged commodity prices lower and led the TSX and Dow to triple-digit losses on Thursday.

The TSX ended last week down about 0.78 per cent while the Dow was off about one per cent.

Another round of North American economic data is lined up for this week. In Canada, real GDP for April, due Friday, is expected to show a continuation of the sluggish economy that characterized the first quarter, with consensus forecasts pointing to a 0.2 per cent increase over the previous month.

U.S. consumer confidence data comes out on Tuesday, durable goods orders for May will be released Wednesday and U.S. personal income and spending data for May is due on Friday.

With files from The Associated Press