Toronto stocks fell hard on Monday, despite a late-day rally, as market players flinched ahead of upcoming second-quarter earnings and news that telecoms giant BCE Inc. was facing a $1.2 billion lawsuit.

According to the latest data, the Toronto Stock Exchange’s S&P/TSX composite index closed down 142 points, or 2.08%, at 6,677.76.

A buying spree near the end of the session pushed the market up from its session low of 6,624.48 but still at its lowest closing level since Sept. 27.

All 10 of the TSX’s subgroups closed lower, pulled down particularly by a 3.9% slide in the industrials sector and a 4.7% retreat by the telecoms group.

BCE ended the session down $1.48 a share, or 5%, at $26.07 a share. The company said that some creditors of its former international carrier, Teleglobe Inc., had filed a lawsuit against it, seeking $1.19 billion in damages.

Shares of BCE rival Telus Corp. fell 63 Canadian cents, or 5%, to $11.16.

Although many pundits are hesitant to predict when the markets will bottom, some drew confidence as even the traditional “safe-haven” stocks bowed to bearish sentiment.

Gold stocks, which were up 3% earlier in the session as market players jumped to the safe-haven issues to shield themselves from a wilting U.S. dollar, eventually succumbed to a broad-based decline and ended the day down 2.9%.

A weaker U.S. dollar helps global investors achieve greater purchasing power in gold.

Barrick Gold Corp. closed down $1.59, or 5.6%, at $26.70, while Agnico-Eagle Mines Ltd. shed 63 cents, or 2.7%, at $22.46.

The S&P CDNX also closed down today but only slightly. The small-cap exchange dropped 8.16 points to close at 1119.34 or a decline of 0.72%

In New York stocks staged a breathtaking late-day rally as bargain-hunting investors snapped up stocks pummeled to 1997 lows.

Technology stocks led the rebound, yanking up the Nasdaq composite index from May 1997 lows touched earlier in the session. Blue-chip stocks also posted a late rally, scrambling up from a 440-point loss, but still closed lower for the sixth straight session.

At their lowest points, the Dow Jones industrial was down 5.1% and the benchmark Standard & Poor’s 500 index touched a low unseen since October 1997. Stocks slumped as jitters over the second-quarter earnings season and fears of more accounting blowups helped push the euro above parity with the dollar for the first time since February 2000.

The Dow average lost 45.34 points, or 0.52%, to 8,639.19, according to the latest data available. The broad S&P lost 3.47 points, or 0.38%, to 917.92. Defying expectations, the technology-loaded Nasdaq finished up 9.01 points, or 0.66%, at 1,382.54.