The Canadian stock market plunged deep into the red on Tuesday, following news of credit downgrades in Spain, and muted earnings from key U.S. companies.

After losing more than 200 points earlier in the day, the S&P/ TSX Composite Index bounced back a little, and was down 177.70 at closing, or 1.43 percent, while the S&P/TSX Venture Composite Index decreased by 18.91 points, or 1.45 percent, to 1,289.50.[Company Registration in USA]

Global shares fell as Moody's Investors Service downgraded the credit rating of five Spanish regional governments earlier in the week, adding more to concerns of a worsening euro zone crisis.

The Canadian market on Tuesday followed suit, and was dragged further into negative territory by disappointing figures from key U.S. companies such as DuPont, United Parcel Service, and 3M Co., which all reported lower than expected earnings.

Already hit hard on Monday, energy stocks tumbled further downward, with Suncor Energy losing 2.15 percent to 32.66 Canadian dollars per share. Canadian Natural Resources fared no better, and was down 3.7 percent to 29.64 Canadian dollars a share. Imperial Oil slid by 2 percent to 44.31 Canadian dollars per share.

Financials declined as well, with Royal Bank of Canada slipping 2.8 percent to 56.94 Canadian dollars per share after announcing it is buying Ally Financial Inc.'s Canadian auto finance and deposit business. Canada's second largest Bank, TD Bank, fell by 1 percent to 82.09 Canadian dollars a share. The country's third largest bank, Bank of Nova Scotia, lost 0.9 percent to 53.62 Canadian dollars a share.

In gold, gold giant Barrick Gold Corp's share retreated by 0.9 percent to 38.68 Canadian dollars per share. Its main competitor, Goldcorp, dropped 2.6 percent to 42.25 Canadian dollars a share.

Mining stocks were lower, with Teck Resources down 2.5 percent to 30.54 Canadian dollars a share. First Quantum Minerals lost 4. 15 percent to 21.92 Canadian dollars per share.[Company Formation | Offshore Company | Company Incorporation]

In commodities, copper prices decreased to 3.56 U.S. dollars a pound. Crude oil fell to 86.670 U.S. a barrel, while gold dropped to 1,712.600 U.S. dollar an ounce.

In economic developments, new figures released by Statistics Canada Tuesday showed a less than expected rise in Canadian retail sales for the month of August. Sales figures rose only by 0.3 percent to 39.1 billion Canadian dollars in August from July, while overall sales volume diminished by 0.3 percent. The data suggests that the average Canadian consumers, now burden with higher debt, will provide limited growth for the economy in the third quarter.

Meanwhile, the Bank of Canada announced on Tuesday it is maintaining its 1 percent key interest rate for the 17th consecutive time. The central bank has kept the same rate for two years, and said it will eventually increase the rate to compensate for the hike in household debt. Its latest forecast puts the country's economic growth at 2.2 percent for the year.

In currency, the Canadian dollar was flat at 1.0074 U.S. dollar at closing, 5 p.m. local time (2200 GMT), compared with 1.0075 U.S. on Monday.