RTTNews - Toronto's main index moved sharply lower on Wednesday as a drop in commodity stocks led to weakness for resource stocks. Markets in the U.S. and Europe also posted notable declines.

The S&P/TSX Composite Index dropped 298.67 points or 2.82% to settle at 10,290.12. Last week, the index reached an eight-month high above 10,600.

Energy stocks plunged 4.8% as crude oil fell sharply on the NYMEX following U.S. government data showing a surprise build in weekly inventories. Among the big names, Canadian Oil Sands (COS.UN.TO) lost 6.9%, Canadian Natural Resources (CNQ.TO) fell 6.1%, Suncor (SU.TO) dropped 5.8% and Encana (ECA.TO) lost 4.3%.

Light sweet crude climbed to $66.12 a barrel on the New York Mercantile Exchange, down $2.43 on the session. Prices dropped as low as $64.95 in mid-day trading.

On an upnote, Heritage Oil (HOC.TO) soared more than 15% after the company announced it is discussing a possible reverse takeover with an undisclosed company, according to the Canadian Press.

Mining stocks dropped 4.7% as copper fell 1.75 cents to $2.28 per pound on the Comex. HudBay (HBM.TO) dropped 6.5%, Teck Cominco (TCK.B.TO) lost 5.9% and First Quantum (FM.TO) dropped 4%.

Materials stocks dropped 3.8% and gold stocks fell 3.5% as the precious metal moved sharply lower after earlier challenging $1,000 an ounce.

NovaGold (NG.TO) plummeted 12% after being downgraded to Underperform from Sector Perform by RBC Captial Markets.

Kinross Gold (K.TO) declined 6.5% after the shares were cut to Neutral from Overweight at JP Morgan.

Barrick Gold (ABX.TO) also dropped 2.1% despite being upgraded to Outperform from Sector Perform by RBC Capital.

Eldorado Gold (ELD.TO) fell 5.2% after the company announced it agreed to acquire 57.9 million shares of Sino Gold Mining Ltd from Gold Fields Ltd (GFI) in a private transaction in exchange for Eldorado shares.

Industrial stocks saw a 2.9% decline. WestJet (WJA.TO) plunged 8.6% after the company said its May load factor was down 5.4% and revenue passenger miles dropped 5.8%.

Bombardier (BBD-B.TO) dropped 8.5% after it reported that its first quarter net income was US$158 million, compared to US$229 million for the same period last year. Earnings per share were US$0.09, compared to US$0.12 last fiscal year.

In other economic news, Magna International (MG.A.TO) rose 1.5% was upgraded by CIBC to Sector Outperform from Sector Perform.

Gildan Activewear (GIL.TO) fell 3.4% after it was initiated at Underweight by Thomas Weisel Partners.

Reitmans (RET.TO) slipped 4.1% after the stock announced that its first quarter net earnings decreased to C$7.80 million or C$0.11 per share, from C$18.44 million or C$0.26 per share in the year ago quarter.

Canadian Western Bank (CWB.TO), Harry Winston Diamond Corp. (Hw.TO) and Wi-Lan (WIN.TO) are on the earnings calendar for tomorrow before the opening bell.

On the economic front tomorrow, Canadian buildings permits data for April is planned for release at 8:30 a.m. ET.

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