The S&P/TSX composite index suffered a painfull drop today -- down 813.97 points or 7 percent to 10,900.54 -- as traders reacted to disappointing economic data out of the US, a drop in commodity stocks and uncertainty over this Friday's vote on the $700 billion bailout plan.
Shares of North American fertilizer companies tumbled on Thursday, after Merrill Lynch chopped its ratings on the sector to ''underperform'' from ''buy'' citing an uncertain near-term earnings outlook.
The brokerage firm downgraded ratings on Potash Corp, Agrium Inc, Mosaic Co, Intrepid Potash, CF Industries and Terra Industries.
In earnings -- Richelieu Hardware Ltd reported a 5.8 percent rise in quarterly profit on Thursday as higher margins and lower interest and income tax expenses offset tough economic conditions and the effects of a stronger Canadian dollar.
The company, which imports and distributes specialty hardware and produces kitchen cabinets and doors, said it earned $9.6 million, or 42 cents a share, in its third quarter, compared with a profit of $9.1 million, or 39 cents a share, in the year-before period.
Looking at economic data -- the US Department of Labor said that initial jobless claims for the week ended Sept. 27 rose by 1,000 to 497,000, the highest unemployment rate since 2001. A bit later, the Census Bureau is due to announce its estimates on August factory orders.
Also -- August factory orders in the US fell 4 percent after rising 0.7 percent in the previous month. Economists surveyed by Briefing.com thought orders would fall 2.9 percent.
The Canadian dollar, meanwhile, was trading down 1.22 cents to 92.80 cents US.
BAYSTREET
All of the TSX sub-groups traded lower today -- material stocks were off 17.20 percent; gold issues fell 16.23 percent and mining stocks shed 10.13 percent.
COMEX gold for December delivery fell $43 to settle at $844.30 US an ounce.
Meanwhile, the TSX Venture Exchange was down 94.69 points to 1,311.96 while NASDAQ Canada stocks were off 55.04 points at 639.54.
ON WALLSTREET
Stocks fell steeply Thursday, with the Dow Jones Industrial Average plunging 348 points, as rising jobless claims and plunging factory orders stirred recession fears and concern mounted about whether the $700 billion financial-bailout plan will pass Congress after being approved by the Senate.
The Dow Jones Industrial Average dropped 348.62 points, or 3.2 percent, to 10,482.45, and the S&P 500 lost 46.78 points, or 4 percent, to 1114.28. The Nasdaq slipped 92.68 points, or 4.5 percent, to 1976.72.
After the close of Wednesday's trading, the Senate passed the bailout with a 74-25 vote. The House of Representatives had rejected an earlier version of the proposal on Monday, and the stock market responded with one of its worst performances in recent memory.
In an attempt at offering additional support to the stock market, the Securities and Exchange Commission extended through Oct. 17 a ban on short sales of financial stocks. The original ban had been slated to expire today.
General Electric fell 9.6 percent. Its shares came under pressure Wednesday amid concerns about its financial arm. It also announced a $12 billion public offering, due to be priced today, and an investment from billionaire investor Warren Buffet.
In the technology space, Reuters said Japanese firm Fujitsu was in discussions with data-storage company Western Digital about a potential sale of Fujitsu's hard-drive business.
Longer-term U.S. Treasury securities were higher in price. The 10-year was up 10/32 to yield 3.7 percent, and the 30-year was gaining 24/32, yielding 4.17 percent. The American dollar was stronger against the euro and pound but falling vs. the yen.
U.S. light crude oil for November delivery fell $4.56 per barrel to settle at $93.97 US a barrel on the New York Mercantile Exchange.
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