OTTAWA - North American stocks tumbled in early trading Monday and gold prices surged amid a rout in global markets after Standard & Poor's downgraded the U.S. credit rating for the first time.

The Toronto stock market fell nearly 350 points just minutes after the opening bell and Wall Street's main market plunged nearly 200 points.

S&P cut the long-term debt rating for the U.S. by one notch late Friday. The downgrade wasn't unexpected, but investors were already nervous about a weak U.S. economy, European debt problems and Japan's recovery from its March earthquake and tsunami.

Meanwhile, gold soared to a record high above US$1,700 an ounce and the Canadian dollar tumbled nearly a full cent as nervous investors piled into U.S. Treasurys and precious metals.

The loonie lost 0.92 of a U.S. cent to 101.32 cents.

On energy markets, fears of an economic slowdown caused by the debt crisis, dragged down oil prices , as they lost $3.31 to US$83.61 a barrel after falling about US$8 last week.

Canadian and U.S. investors were already expecting a selloff before markets opened as bad news from overseas dampened their expectations.

In Europe, the German DAX index fell 2.3 per cent. In Asia, Japan's Nikkei 225 index fell 2.2 per cent.

Investors, beset by worries about the U.S. debt downgrade, Europe's financial crisis and slowing global growth, sought safety in gold.

"Investors are concerned about a rising risk of global recession, credit downgrades especially now in the eurozone, such as France, the threat of a major bank bust and a global liquidity trap as investors stay in cash," said Neil MacKinnon, global macro strategist at VTB Capital, a U.S. money manager.

A slowing recovery and high debt are now also threatening to engulf Italy and Spain and have sharpened fears that a fragile global recovery could easily derail.

The G7 held a conference call Sunday to discuss the economy, with Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney taking part.

Flaherty said in a statement he was confident appropriate actions have been agreed to in order to ensure ongoing global financial stability and growth.

G7 members issued a joint statement pledging increased co-operation to attack economic problems and prevent a market meltdown.

The European Central Bank later said it would "actively implement" a bond-purchase program to boost Spanish and Italian bonds and drive down interest yields that threaten those countries with financial disaster.

The Toronto Stock Market lost 783 points or six per cent last week.