North American stock markets plunged Wednesday afternoon as a disappointing read on American retail sales deepened pessimism about the state of the global economy.
The S&P/TSX composite index lost 166.80 points, or 1.2%, to close Wednesday at 13,869.88, as the TSX fell further into correction territory, losing more than 12% since the record highs of last month and close to shedding all its gains for the year.
The Canadian dollar regained 0.26 cents at 88.77 cents U.S.
The TSX energy sector has been the major weight on the Toronto market, plunging 19% over the last month. Still, Imperial Oil gained 64 cents to $50.03, though Canadian Natural Resources slid 53 cents to $36.03.
The financials group was also a major weight, amid earnings disappointments from Bank of America and U.S. lender Keycorp. North of the line, Royal Bank fell $1.53 to $77.26, and Bank of Nova Scotia shed $1.42 to $65.80.
The TSX also felt added pressure from the base metals group, losing today for a loss of 20% over the last month as December copper gave back eight cents to $3.01 U.S. a pound. Teck Resources dipped 35 cents to $17.92
Rail stocks continued to fall alongside miners, taking the industrial group down as Canadian National lost 32 cents to $70.49, while CP Rail fell $2.54 to $210.49.
Among gold issues, Goldcorp doffed 20 cents to $26.59, and Barrick Gold let go of 21 cents to $15.24.
Economically speaking, figures released by the Canadian Real Estate Association showed that national home sales fell 1.4% from August to September. Actual (not seasonally adjusted) activity stood 10.6% above September 2013 levels. CREA also said the number of newly listed homes declined by 1.6% from August to September.
ON BAYSTREET
The TSX Venture Exchange dropped 24.72 points to 778.36.
All but one of the 14 Toronto subgroups were lower on the day, weighed most by metals and mining, down 3.4%, while financials and health-care each suffered 2.4%.
Only gold held out against the negative tide, inching up 0.2%
ON WALLSTREET
Selling pressure intensified on Wall Street Wednesday, as the Dow Jones Industrial Average fell more than 400 points at one point and U.S. stock benchmarks sank to multi-month lows.
The Dow Jones Industrials plummeted 173.45 points, or 1.1%, to close at 16,141.74. The blue-chip index is down 4% year-to-date.
The S&P 500 dumped 15.21 points to 1,862.49. The NASDAQ index surrendered 11.85 points to 4,215.32, on track to close 10% below its peak reached on September 2
Among the big companies reporting earnings ahead of the bell, Bank of America reported a third-quarter loss that was smaller than expected.
J.P. Morgan Chase & Co. was the biggest loser in the Dow Jones Industrial Average falling nearly 5%. The Financial Select Sector SPDR Fund which tracks financial stocks in the S&P 500 SPX fell 3.4%.
AbbVie Inc. shares fell 1.3% after the U.S. drug maker indicated it’s reconsidering a $54-billion U.S. deal to buy Shire PLC in light of new Treasury rules that make that deal less attractive.
Shares of Shire slumped 26% in London, weighing on the FTSE 100, while its U.S.-listed shares sank 23%.
The AbbVie news spilled over to other so-called inversion plays. Covidien PLC which earlier this year agreed to be acquired by Medtronic Inc. led S&P 500 decliners.
Hazmat-suit related companies that recently rallied on Ebola fears were surging once again. Shares of Lakeland Industries Inc. rallied 14%, Alpha Pro Tech Ltd. jumped 12% and Versar Inc. soared 46%.
American Express, Netflix Inc. and eBay Inc. will report after the close.
Economists immediately slashed their U.S. GDP growth forecast for the third quarter. Barclays and Credit Suisse said tracking GDP growth fell to 3% from 3.3%
Before the opening bell, the September retail sales report showed the first decline in eight months. Sales were down 0.3%, in large part due to fewer vehicle purchases and a decline in gasoline. Inflation data also disappointed with the producer-price index for final demand decreasing 0.1%, versus expectations for a 0.1% increase.
The economic reports also confirmed some traders' views that the U.S. Federal Reserve will not move to hike interest rates in the middle of next year, as expected by many Wall Street economists.
Manufacturing data for the New York region also showed a slowdown, with the New York Fed's Empire State index plunging to 6.2% in October after hitting a five-year high last month.
Prices for 10-year U.S. Treasuries spiked yet again, dropping yields to 2.09% from Tuesday’s 2.21%. Treasury prices and yields move in opposite directions.
Oil prices dipped 16 cents to $81.68 U.S. a barrel.
Gold prices moved higher $6.20 to $1,245.50 U.S. an ounce.
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