Stocks on Bay Street traded lower this afternoon -- led by a decline in mining and financial stocks -- as traders weighed a $595-million charge at Scotiabank and more negative economic data from the United States.
The S&P/TSX composite index was down 229.30 points to 8,606.43.
Bank of Nova Scotia has warned of a bigger-than-expected $595-million hit to its quarterly earnings caused by financial-market upheaval. The other banks are expected to suffer similarly to Scotiabank, which releases its results Dec. 2.
Bank of Canada governor Mark Carney strongly indicated today that the central bank will cut interest rates further next month in an effort to stimulate the economy. Carney told a luncheon in London that downside risks have grown, while inflation is less of a concern.
In earnings news -- supermarket operator Metro Inc. rang up $72.3 million in summer-quarter profit, up 25.5 percent from year-ago earnings that were reduced by the integration of A&P stores. Sales were $2.48 billion, up 1.8 percent from a year ago, or 1.5 percent on a same-store basis.
On the dta front -- Statistics Canada's composite leading index -- an indicator of future activity -- fell 0.4 percent in October. It was the biggest drop since the early-1990s recession, after a 0.3 percent drop in September.
Down south -- the Bureau of Labor Statistics reported that its consumer price index fell 1 percent for October thanks in part to falling energy prices. The CPI's decline was its largest on record. Economists were expecting a decline of 0.8 percent. The core rate dropped 0.1 percent, following a 0.1 percent uptick in September.
Separately, the Census Bureau said that housing starts declined 4.5 percent to an annual rate of 791,000 for October, the largest one-month decline since the government began tracking the figures.
The Canadian dollar, meanwhile, was trading at 80.75 cents, down 0.48 cent after losing 0.44 cent Tuesday.
BAYSTREET
Two of the TSX sub-groups traded higher this afternoon -- gold stocks were up 2.76 percent and material issues were ahead 0.61 percent.
Gold futures climbed, with the contract for December up $22.30 to $755 US an ounce.
On the downside -- mining stocks were down 6.84 percent followed by a 5.10 percent drop in industrial issues and a 4.22 percent slump in financial stocks.
Meanwhile, the TSX Venture Exchange moved down 4.40 points to 745.85 and NASDAQ Canada stocks fell 7.49 points to 456.87.
ON WALLSTREET
U.S. stocks declined Wednesday after the biggest-ever drop in consumer prices and another gloomy housing report offered little cheer to investors already fretting about the fate of the Big Three automakers.
The Dow Jones Industrial Average was losing 203 points to 8222, and the S&P 500 was down 26 points to 833. The Nasdaq was falling 45 points to 1438.
Shares of General Motors Corp. weighed most heavily on the blue chips, with shares of the automaker down 12 percent.
The U.S. auto companies weren't the only ones coping with a tough market. Toyota said it will cut production in North American plants and lay off 250 of its temporary workers.
Boeing, which along with GM is a component of the Dow Jones Industrial Average, is resetting its production schedule as it attempts to recover from a strike by its machinists' union, according to a report by The Wall Street Journal.
Meanwhile, industrial conglomerate and fellow Dow company General Electric said it would reorganize its GE Capital finance branch to cut costs.
Longer-dated U.S. Treasury securities were rising in price. The 10-year note was up 14/32 to yield 3.47 percent, and the 30-year was gaining 28/32, yielding 4.06 percent. The American dollar was climbing vs. the yen but weakening against the euro and pound.
Oil prices turned lower Wednesday after a government report showed increased supplies of crude and gasoline, reinforcing concerns that demand for petroleum products was waning.
U.S. crude for December delivery fell 36 cents to $54.03 US a barrel. Just before the report, the contract -- which expires Thursday -- was up 63 cents at $55.02 US a barrel.
The Energy Department said crude supplies rose by a slightly 1.6 million barrels in the week ended Nov. 14.
The government also reported that supplies of gasoline had risen by 500,000 barrels, and stockpiles of distillates, which are used to make diesel fuel and home heating oil, fell by 1.5 million barrels.
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