TORONTO -- North American markets turned sharply lower Friday as renewed fears over a possible Greek debt default and its knock-on effects on the world economy sent investors scrambling for the exits.

In Toronto, the S&P/TSX composite index was down 91.59 points at 14,739.29 at midafternoon, with energy and financial issues among the leading decliners.

The loonie, meanwhile, was off 0.22 of a U.S. cent at 81.25 cents as the American greenback strengthened.

On the commodity markets, the July crude contract shed 53 cents to US$60.24 a barrel, while August gold lost early gains and was down 80 cents at US$1,179.60 an ounce.

In New York, markets gave back a big chunk of their advance over the previous two sessions, with the Dow Jones industrial average suffering a triple-digit loss, down 141.84 points at 17,897.53.

The Nasdaq index dropped 27.94 points to 5,054.57 and the S&P 500 fell 14.27 points to 2,094.59.

The decline, which followed similar setbacks on most European bourses, came after an unexpected decision late Thursday by the International Monetary Fund to walk out of the negotiations with Greece.

The decision by the IMF, which cited lack of progress in the talks, heightened concerns that Athens could default on its debts.

Greece's 240 billion-euro bailout expires June 30, at which point the country will lose access to the rescue loans it needs to repay debts and avoid a default that could force it out of the euro.

Greece said Friday it would present new proposals over the weekend in an attempt to breathe new life into stalled talks, but confirmation didn't come until after the close of markets in Europe.

The main index in Athens suffered the most, down 5.9 per cent, but other indexes were also sharply lower, with Germany's DAX losing 1.2 per cent, the CAC-40 in France off 1.4 per cent and Britain's FTSE 100 down one per cent.

Ninh Chung, head of investment strategy at SVB Asset Management, said such sharp turns on markets are likely to continue until Greece and its creditors reach a deal.

"There had been optimism over Greece (over the past week) and now it seems like we've had a complete 180," Chung told The Associated Press.