Another four years under U.S. President Barack Obama is seen by some experts as a plus for Canada’s economy, but the potential for ongoing political gridlock with a Republican-controlled Congress weighed on markets Wednesday. In Toronto, stocks were also weighed down by significant earnings misses in the resource and industrial sectors.
The S&P/TSX composite fell 119.49 points, or 1%, Wednesday at 12,241.71
The Canadian dollar moved lower 0.52 cents to 100.28 cents U.S.
On the TSX, the selloff was broadly based, with almost all sectors posting losses, led by energy. A Mitt Romney win would have likely been more favourable for some energy stocks, given he had planned to open up more land to exploration and development.
Coal stocks are particularly hard hit, as Barack Obama's push against fossil fuels looks set to continue. Teck Resources was down 90 cents, or 2.7%, at $32.63.
Bombardier Inc. said it would delay by about six months the first flight of its C-Series jetliner and cut about 1,200 jobs in its train manufacturing division. It also reported a 6% drop in revenue and said it would close a freight car plant in Aachen, Germany, and said it would record a restructuring charge of not more than $150 million in the current quarter. Its shares are down 14 cents, or 3.9%, to $3.47 by noon ET.
WestJet profits soared almost 80% in the third quarter as the Calgary-based airline got lift from revenues that were up almost 12%. Shares were down six cents midday at $17.90
Agrium Inc. reported adjusted profit of $1.34 per share, below a consensus analyst estimate of $1.76 per share. Shares are down 9.7% to $96.05 at noon.
Enbridge Inc. improved its third-quarter profit over the same period last year but the Calgary-based pipeline company’s adjusted earnings fell just short of analyst estimates. Shares were off 44 cents to $39.65.
ON BAYSTREET
The TSX Venture Exchange lost 15.36 points to 1,287.78
All but one of the 14 Toronto subgroups were lower at lunch time, with global base metals falling 2.3%, metals and mining listing lower by 2.2% and energy down 1.8%.
The lone holdout was still gold, up 0.6%.
ON WALLSTREET
A selloff on Wall Street gained momentum Wednesday, with the Dow falling below 13,000 for the first time since Sept. 4, as investors focused on how President Obama plans to avoid the fiscal cliff after he won re-election Tuesday night.
The Dow Jones Industrials dumped 300.01 points, or 2.3%, to greet noon at 12,945.70. JPMorgan Chase and Bank of America were the biggest drags on the blue-chip index. Other banks followed suit, with shares of Morgan Stanley, Goldman Sachs and Wells Fargo all sharply lower.
The S&P 500 moved down 32.22 to 1,396.17, and the Nasdaq Composite Index got bruised 68.11 points to 2,943.82
Investor attention is already turning to what Tuesday's results mean for the looming fiscal cliff, the market's biggest headwind, according to market strategists and money managers polled in a recent survey.
Alpha Natural Resources sank 10%, while Peabody Energy, James River Coal Co., CONSOL Energy and Walter Energy were also down. Oil companies Exxon Mobil Chevron and Halliburton also fell.
But hospital stocks HCA and Community Health Systems were big gainers, as Obama's win means the president's health care reform legislation is here to stay.
Economically speaking, on Wednesday afternoon, the Federal Reserve will release data on consumer credit for September, which is expected to have expanded by $10.6 billion U.S, according to a survey of analysts by Briefing.com.
The price on the benchmark 10-year U.S. Treasury leaped for the rafters, pushing the yield down to 1.64% from 1.74% late Tuesday. Treasury prices and yields move in opposite directions.
Oil prices were down $3.52 at $85.19 U.S. a barrel.
Gold prices dipped $4.40 per ounce to $1,710.60 U.S.
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