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At noon: Rally upended Add to ...

North American stocks on Monday were on track to post their most severe losses since the end of March, as investors recoiled from financial stocks.

At noon, the Dow Jones industrial average was down 237 points or 2.9 per cent, to 7894, putting it back below the 8,000 threshold. The broader S&P 500 was down 30 points or 3.5 per cent - the biggest setback in point-terms since the market began to rebound in early March.

All 10 subindexes at the S&P 500 were down, suggesting a widespread decline. However, financials led the way down after Bank of America Corp. beat expectations with its first quarter results, but only after a number of one-time gains, renewing concerns about the economy. The sector sank 6 per cent.

In other moves, consumer discretionary stocks fell 4.2 per cent and industrials fell 4.5 per cent. Sectors relatively immune to a deteriorating economy were less affected during the selloff. Health care stocks fell 1.5 per cent, consumer staples fell 1.4 per cent and utilities fell 0.7 per cent.

In Canada, the S&P/TSX composite index was down 250 points or 2.7 per cent, to 9188. Financials were also weak, falling 3.6 per cent. Industrials fell 3.5 per cent and consumer discretionary stocks fell 2 per cent.

However, energy stocks were the weakest, falling 4.7 per cent after the price of crude oil fell below $47 (U.S.) a barrel, down nearly $4. On the other hand, materials rose 2.4 per cent on a rebounding gold price.

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