The S&P/TSX composite index closed in the red today -- down 455.60 points to 9,795.80 -- with the Canadian dollar taking a 1.8 percent hit after the Bank of Canada cut rates while oil dropped in price despite talks of an OPEC production cut.
The Bank of Canada trimmed its trendsetting interest rate another quarter-point Tuesday, saying Canada needs the stimulus to ward off the headwinds from a United States already in recession and a global economy heading there.
The move, following a half-point reduction two weeks ago, drops the bank's overnight rate to 2.25 percent, just slightly above the 2 percent level it reached four years ago. And the bank hinted that it may cut further at the next scheduled announcement in December.
In corporate news -- FNX Mining Co. Inc. has suspended commercial nickel production at its Levack mine near Sudbury, Ont., citing low prices and high costs. Its shares tumbled 94 cents to $5.86.
Nemi Northern Energy & Mining Inc., a Vancouver-based coal developer, has agreed to merge with Australia's Aviva Corp. Nemi stock was up 8.16 percent to 26.5 cents.
In the US - The Federal Reserve announced that it would buy commercial paper from money-market mutual funds in another effort to massage cramped credit markets. Abroad, Canada's central bank lowered its target interest rate 25 basis points to 2.25 percent, and France announced plans for a $14 billion capital injection into its largest banks.
The Canadian dollar, meanwhile, fell to a three-year low against the U.S. currency. The loonie was last trading down 1.67 cents to 82.06 cents US.
BAYSTREET
Only one of the TSX sub-groups traded higher today -- health-care issues were up 3.45 percent.
On the downside -- gold issues fell 9.00 percent; mining stocks dipped 5.80 percent and energy issues shed 5.10 percent.
COMEX gold for December delivery fell $22 to $768 US an ounce.
Meanwhile, the TSX Venture Exchange was off 15.55 points to 969.39 while NASDAQ Canada stocks were down 30.64 points at 508.52.
ON WALLSTREET
U.S. stocks on Tuesday scaled back an opening slide that saw the technology sector hammered by disappointing earnings reports and bleak forecasts from chip maker Texas Instruments Inc. and chemical giant DuPont.
The Dow Jones Industrial Average finished down 231.11 points, or 2.5 percent, at 9,033.66, and the S&P 500 gave back 30.41 points, or 3.1 percent, at 954.99. The Nasdaq lost 73.35 points, or 4.1 percent, at 1696.68.
DuPont reported that third-quarter earnings plunged to 40 cents per share, compared to 56 cents during the same period last year. The chemical giant blamed disruption in Texas-based manufacturing because of Hurricane Ike, as well as economic slowness. Also, DuPont lowered its full-year 2008 guidance to a range of $3.25 to $3.30 per share, compared to its prior guidance of $3.45 to $3.55.
Texas Instruments also reported reduced third-quarter profit after the close Monday and forecast fourth-quarter revenue would fall sharply, missing estimates. The chipmaker also said it is looking to sell part of its wireless operations. Shares fell 5 percent Tuesday.
Caterpillar reported lower earnings and higher revenue versus a year ago, and shares fell 4 percent. Pfizer reported higher quarterly earnings that topped estimates. Shares gained 2 percent.
National City reported a net loss of $729 million as the regional bank struggled to build loan loss reserves. While this is much worse than its $19 million net loss in the third quarter of 2007, it's an improvement from the abysmal $1.8 billion loss in the second quarter of 2008.
Longer-dated U.S. Treasury securities were rising in price. The 10-year was up 1-3/32 to yield 3.71 percent, and the 30-year was gaining 1-5/32, yielding 4.19 percent. The American dollar was gaining on the euro and pound but shrinking vs. the yen.
U.S. light crude oil for November delivery fell $3.36 to settle at $70.89 US a barrel on the New York Mercantile Exchange after hitting a 13-month low last week.
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