The Toronto stock market quickly slipped into the negative Tuesday amid mounting anxiety over the euro-zone on word that Greek voters will head back to the polls now that attempts to form a coalition government have failed.
The S&P/TSX Composite Index plummeted 145.48 points, or 1.3%, to end the session at 11,343.05
The Canadian dollar fell 0.28 cents to 99.38 cents U.S.
Attempts to form a coalition government in Greece have failed since an inconclusive election May 6.
Greek socialist leader Evangelos Venizelos said Tuesday that Greece is going to new elections after talks produced no deal.
Although no party won enough seats in Greece’s recent election to form a government, voters gave support to political parties that want to cancel or renegotiate the terms of a massive financial bailout by international lenders that requires harsh austerity measures.
Worries about Greece sent the TSX down 206 points Monday to its lowest level since early October. The showing left the main index almost 4% below where it started the year. It has tumbled almost 10% since its 2012 highs racked up in late February.
Commodity prices were weak after closing at their lowest level in months.
The energy sector was off as Canadian Natural Resources declined 80 cents, or 2.6%, to $29.45. Rival Imperial Oil was off 12 cents to $42.02, while Suncor dumped 32 cents to $27.67.
The gold sector was down as bullion ticked lower after falling to its lowest close since late December. Barrick Gold faded $1.42, or 3.9%, to $35.23. Elsewhere, Goldcorp shed 87 cents, or 2.6%, to $32.75, and Kinross Gold lost 37 cents, or 4.8% to $7.36.
The base metals sector was flat as copper extended a series of losses that took the metal to its lowest level since mid-January on Monday. The July contract dipped three cents to $3.52 U.S. a pound on Tuesday. Copper is viewed as an economic bellwether as it is used in so many industries.
But prices have fallen sharply — down over 7% since May 1 alone — amid data showing a slowing global economy. Ivanhoe Mines dipped 44 cents, or 4.8%, to $8.75.
Financials were weak with Royal Bank down 31 cents to $52.91, while Sun Life Financial jettisoned 55 cents, or 2.4%, to $22.34.
On the economic slate, figures released this morning by Canada Mortgage and Housing Corporation indicated that national resale housing activity edged up 0.8% in April.
The agency also said the average home sold for $375,810 across the country last month, a rise of 0.9% from the same month last year.
April home sales were 11.5% higher than where they were the same month a year earlier, partially because sales in April 2011 were lower after buyers rushed to buy the month before ahead of new mortgage rules.
ON BAYSTREET
The TSX Venture Exchange capsized 63.76 points to 1,240.07, while the Nasdaq Canada deducted 9.16 points to 365.04.
All but one of the 14 Toronto subgroups were down on the day. Gold and stocks in the metals and mining gave back 3.5%, while materials lost 3.4%.
The lone stalwart was in telecoms, up 0.6%.
ON WALLSTREET
U.S. stocks struggled during a choppy trading Tuesday as investors digested mixed news out of Europe.
Better-than-expected economic growth in Germany was encouraging, but Greece continues to be a question mark.
Politicians in Athens failed to agree on a coalition government, and President Karolos Papoulias' office said the debt-wracked country will hold new elections in June in response to the political stalemate.
The Dow Jones Industrials ducked back 63.35 points to close at 12,632.
The S&P 500 subtracted 7.70 points to 1,330.65. The tech-rich Nasdaq Composite Index shed 8.82 to 2,893.76.
Avon Products said that Coty has withdrawn its bid for the company, less than a week after it upped its offer with backing from Warren Buffett's Berkshire Hathaway. Avon's board had said it wanted a week to consider the latest offer, but Coty demanded an immediate answer. Shares of Avon tumbled.
Dow component Home Depot, a bellwether of activity in the nation's troubled home-building industry, reported quarterly earnings in line with estimates but issued an earnings forecast that fell short. The stock dipped.
Shares of daily deals site Groupon surged for a second day. The company reported narrowing losses and better-than-expected sales Monday, giving investors hope that it can steady its ship.
Chesapeake Energy's stock dipped after Standard & Poor's downgraded the company's credit rating, citing "mounting turmoil" amid concerns about corporate governance practices and the likelihood Chesapeake will face an even wider budget gap than the agency had previously anticipated.
In a sign of strong investor demand for shares in its upcoming initial public offering, Facebook boosted the target price range for its stock. Facebook now expects to price its shares at $34 to $38 U.S. each, up from the $28 to $35 U.S. range it set earlier this month, according to a Tuesday filing with the Securities and Exchange Commission.
JPMorgan Chase shareholders gathered in Tampa, Fla., for the bank's annual meeting. The shareholder meeting comes just days after the bank disclosed a $2-billion U.S. trading loss, an event that led to the departure of its chief investment officer and forced CEO Jamie Dimon to apologize for what he called "a terrible mistake."
Meanwhile, German economic growth came in at 0.5% in the first quarter. That's far better than the 0.2% decline in gross domestic product at the end of last year that had raised fears of Europe's largest economy possibly falling into recession.
German growth also helped other European countries avoid recession, lifting the reading for all of the European Union to 0.1%, and leaving GDP unchanged in the 17-nation euro-zone.
There had been fears that both the E.U. and euro-zone would report their second straight quarter of declining GDP, the common benchmark for an economy in recession. By that standard, 12 of the nations in the E.U. are now mired in an economic downturn.
Economically speaking, reports on retail sales and inflation for April were close to expectations, providing additional support for stocks.
Retail sales edged up 0.1% last month, below the forecast from a survey of economists, after increasing by 0.7% in March.
The Consumer Price Index was flat in April, as expected, after rising by 0.3% in March.
The price on the benchmark 10-year U.S. Treasury inched upward, pushing the yield down to 1.78% from Monday’s 1.79%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil fell back $1.64 to $93.14 U.S.
Gold futures for June delivery dropped $3.90 to settle at $1,557.10 U.S. an ounce.
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