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The loonie was largely unchanged, despite Libyan unstability and poor retail sales figures Tuesday. (Mark Blinch/Reuters) (Mark Blinch/Reuters)

Canada's benchmark stock exchange and currency were lower Tuesday, insecure because of Libyan instability and lacklustre Canadian retail sales figures.

The Canadian dollar dropped against the U.S. dollar, losing 0.73 of a cent, to 100.92 cents US, as risk averse investors sought the perceived safe haven of the greenback.

The S&P/TSX composite index plunged 159.43 points, or 1.1. per cent, to 13,963.68, while the TSX Venture Exchange was down 60.13 points, or 2.5 per cent, to 2,363.55 .

'The Middle East is certainly front row centre' — Portfolio manager Adrian Mastracci

In New York, the Dow Jones industrial average fell 178 points, or 1.4 per cent, to close at 12,213. The S&P 500 index fell 27, or two per cent, to 1,315. The Nasdaq fell 77, or 2.7 per cent, to 2,756.

North American investors returned Tuesday as deep rifts opened up in Moammar Gadhafi's regime in Libya, air force pilots defected and a bloody crackdown on protests continued in Tripoli, the capital. International investors fretted over how the crisis will end and what the impact will be on the North African country's oil production.

"The market has both some opportunities and it's also showing some risk … there's lots of moving parts, but the Middle East is certainly front row centre," said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver.

The dollar was lower due to a poor Canadian retail sales report from December, which showed sales fell 0.2 per cent from the year before.

Gold and oil rally

However, strength in gold and oil prices partially propped up the Canadian dollar against a further slide.

April gold rose $12.50, to $1,401.10 US per ounce, in electronic trading on the New York Mercantile Exchange, while copper prices fell 14 cents, to $4.35 a pound.

April crude prices surged $5.71, to $95.42 US a barrel, amid uncertainty surrounding a large portion of the world's supply because of demonstrations in Iran, Algeria, Jordan and Libya and the ouster of regimes in Tunisia and Egypt. Iran is the world's fourth-largest oil producer. Algeria and Libya are also important crude suppliers.

The uncertainty led investors to move money into Canadian oil stocks. The TSX/S&P energy index finished the day up 0.9 per cent.

This pushed shares in oil and gas producer Suncor, despite its having operations in Libya, to a 1.8 per cent gain, closing at $45.06

Other Canadian companies with exposure to Libya were lower.

Engineering firm SNC-Lavalin was down 4.8 per cent, to $58.00, infrastructure firm Pure Technologies was off 10 per cent, to $5.35, and oil and gas firm Sonde Resources was down 5.3 per cent, to $3.96.

Oil and gas firm Nexen, with operations in Yemen, was off 2.2 per cent, to $24.64. Canadian firms with a presence in Egypt were also lower, including Agrium, down 2.7 per cent, to $89.55, TransGlobe Energy, off 6.3 per cent, to $13.72, and methanol producer Methanex, down 2.1 per cent, to $28.01. Sea Dragon Energy lost a cent and a half, to 24 cents.

With files from The Canadian Press