TORONTO (Reuters) - The Toronto Stock Exchange's main index snapped a two-session winning streak Tuesday and ended more than 100 points lower, hit by a drop in commodity prices and continued fears over rising interest rates.The S&P/TSX composite index closed down 108.49 points, or 0.78 percent, at 13,724.33.

"What we're seeing is rate concerns are beginning to permeate the market," said Michael Sprung, president of Sprung & Co. Investment Counsel.

"I would suspect that over the next few months or so that's going to continue to exert pressure on the stock market as people are concerned about two things: underlying inflation and if that causes rates to increase."

Nine of the TSX index's 10 main groups were lower, led by a 1.1 percent drop in the resource-laden materials group. Consumer staples were up 0.13 percent.

Weakness in commodity prices hit the materials group with the price of US gold for August down at around $653 an ounce, while base metals also fell.

Barrick Gold was off 32 Canadian cents, or 1.1 percent, at C$30.03, and Goldcorp dropped 23 Canadian cents, or 0.9 percent, to C$25.35.

First Quantum Minerals was off C$5.51, or 5.6 percent, at C$93.14.

US crude oil slipped 62 cents to $65.35 a barrel, on expectations US gasoline supply will rise. Suncor Energy was down C$1.49, or 1.6 percent, at C$91.80, and Nexen was off 50 Canadian cents, or 1.6 percent, at C$31.65.

Interest-rate sensitive financials slipped 0.5 percent as investors took direction from south of the border, where stock indexes sank on jitters over rising interest rates.

Bond yields climbed to five-year highs, sparking fears that higher borrowing costs could cut into corporate profits and curb take-overs.

Toronto-Dominion Bank fell C$1.23, or 1.7 percent, to C$72.26, while Royal Bank of Canada dropped 41 Canadian cents, or 0.7 percent, to C$56.35.

"What we're seeing is a very reactionary and nervous market right now," said Sprung.

The market is likely in a "corrective mode" that will probably take a while to run its course, said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management in Calgary.

"I don't think we're through this yet," he said.

"It's never a one- or five-day wonder. It usually takes quite a period of time to work its way out. Whether we go flat or down is the question," Kerkovius said.