Toronto stocks plunged Monday as fears of further slowdown in the U.S. led to billions of dollars in selloffs.

The S&P/TSX composite index closed down 604.98 points, or 4.75%, at 12,132.14.

It was the biggest one-day drop for Candian stocks since 9/11.

In the past week, the index has shrunk by more than 1,500 points, or 11.4%.

Every sector was down, led by resource and financial stocks. The TSX materials group dropped 5.7%; the energy group slumped 5.7%; financials fell 3.9%.

The Royal Bank of Canada shares fell $1.79, or 3.8%, to $45.92, while CIBC lost $2.3, or 3.49%, closing at $64.70.

Weighing on the TSX was a big drop in the price of oil. The price for light sweet crude oil for February delivery was down US$1.95 a barrel at US$88.62 a barrel.

Gold prices also plunged US$19.50 to US$862.20 an ounce.

The session’s big mover was Bombardier Inc., which lost 43¢, or 9.13%, to close at $4.28, on heavy trading of 12,918,413 shares. The company received a US$65 million order to supply 12 two-car “green” diesel multiple units to Angel Trains for use by London Overground Rail Operations Ltd.

Quebecor World lost 17¢, or 50.75%, closing at 16.5¢, as the company received authorization from a Quebec Superior Court judge on a US$1 billion financial lifeline to prevent it from running out of money as it restructures.

The junior S&P/TSX Venture composite index closed down 227.69 points, or 8.70%, at 2,390.52.

The Canadian dollar closed down 0.52 of a cent at US$96.81.

Economists expect the Bank of Canada will cut its benchmark lending rate by 25 basis points to 4% at its rate-setting meeting tomorrow.

Asian markets set the tone for Monday’s sharp decline.

Japan’s Nikkei closed down 3.9%, at 13,325.94, its lowest close since Oct. 25, 2005.

Hong Kong’s Hang Seng Index closed down 1,383.01 points, or 5.5%, at 23,818.86.

The selling pressure spread to Europe, where the Financial Times 100-share index fell 5.5% to end at 5,578.2.

Frankfurt’s Dax index dropped more than 7%, while France’s CAC 40 index was down 6.8%.

In New York, financial markets were closed to observe Martin Luther King Jr. Day.

But futures contracts on the Dow and the S&P 500 traded lower, signalling likely market declines for tomorrow.