The Toronto Stock Exchange fell for the fourth day in five on Friday as commodity prices dropped and worries mounted about planned bank taxes in the United States. The S&P/TSX composite index closed down 119.01 points, or 1.01 per cent, to 11,685.37, with the big three sectors of materials, financials and energy causing the most damage.

The most detrimental stocks to the TSX's performance on Friday were Royal Bank of Canada (down 1.69 per cent), Suncor Energy Inc. (down 2.16 per cent), Toronto-Dominion Bank (down 1.54 per cent) and Barrick Gold Corp. (down 2.08 per cent). 

For the week, the index was down 2.24 per cent, making for the biggest weekly loss since late October. During the last five-day period, the TSX gained only on Wednesday. It's now down 0.52 per cent for 2010, the only major North American stock market not to have gained so far in the new year.

The TSX Venture composite on Friday edged down 1.81 points, or 0.11 per cent. to 1,593.47. On the New York Mercantile Exchange, crude oil was down $1.39 to $78 U.S. a barrel, its fifth straight day of decline. Gold was down $12.50 to $1,130.50 U.S. an ounce largely in response to gains in the U.S. dollar. The Canadian dollar was down 57 basis points to 97.14 cents U.S..

Financial stocks on Bay Street fell in the wake of Thursday's announcement by U.S. President Barack Obama of a plan to apply a new tax on banks to recover money the government spent bailing out the financial sector during the past year's downturn. A number of Canadian banks with U.S. operations are expected to be subject to the new levy.

Michael Sprung, president of Sprung & Co. Investment Counsel in Toronto, said the concern about the U.S. tax is not just about its effect on Canadian banks. He said it has the potential to hurt the overall economic recovery in the U.S. and, by extension, Canada.

"It's going to have to be passed onto the consumer in some way," Sprung said. "The banks are facing a lot of changes all at once — higher taxes, higher regulatory capital requirements — all of which are going to eat into profitability. And if that's the case, then it's certainly going to have an effect on how much credit banks are going to be able to make available."

Also in the U.S. financial sector, there was some disappointment Friday in quarterly results from JPMorgan Chase & Co., which included a loss on its retail operations and increased provisions for credit losses. On U.S. markets Friday, the Dow Jones industrial average was down 100.9 points, or 0.94 per cent, to 10,609.65. The Nasdaq composite index was off by 28.75 points, or 1.24 per cent, to 2,287.99.