Early enthusiasm for bargains on Bay and Wall Streets did not hold up Tuesday, and markets on both streets were in negative territory yet again.
Positive earnings from Scotiabank and Bank of Montreal were not enough to arrest the downward trend.
Toronto's S&P/TSX composite index fell 50.96 points on the day, to 7,636.55
The central bank cut its key rate to 0.5%, the lowest ever, aiming to mitigate the worst effects of a rapidly worsening downturn.
Its statement said the outlook for the global economy has continued to deteriorate, with weaker-than-expected activity in major countries.
Bank of Nova Scotia shares were up 29 cents to $27.32 after it reported higher profits today while leaving its dividend untouched. Revenue growth in its three primary business lines helped boost earnings 1% from a year ago to $842 million.
The Bank of Montreal reported a profit of $225 million, down 12% from a year ago, pulled lower by charges related to challenging capital markets. BMO said credit-loss provisions swelled to $428 million from $198 million, but its dividend also is unchanged and its shares slipped three cents to $26.96.
Elsewhere in the group, insurer Manulife Financial lost $1.24 to $10.34. The insurer's share price has been hammered by speculation about its financial solidity and its stock is down from $20 at the start of February.
Royal Bank fell 66 cents to $29.31.
The energy sector rose as EnCana Corp. gained 94 cents to $48.01 and Suncor Energy Inc. advanced $1.32 to $25.07.
Telecoms were weak as Telus Corp. fell 35 cents to $32.65 and Rogers Communications lost 40 cents to $27.93.
The utilities sector also gave up ground, with TransAlta Corp. down 85 cents to $19.50.
The gold sector delivered lift. Goldcorp Inc. rose $1.96 to $36.80.
Magna Entertainment Corp. says its class A shares will be delisted at market close on April 1 for failing to meet the continued listing requirements of the Toronto Stock Exchange. Its shares were unchanged at 35 cents, a long way from its 52-week high of $17.
Back to the banks, Tiff Macklem, Canada’s associate deputy minister of finance, said today that the country’s banks are "well-capitalized." He added that government measures to help lending are not "bailouts," and that Canadian businesses are facing tighter credit conditions.
The Canadian dollar was slightly flat, at 77.41 cents U.S. Canada’s currency depreciated to the weakest in three months after the Bank of Canada cut borrowing costs to the lowest on record and signaled it may use policies beyond interest rates to spur economic growth.
BAYSTREET
Nine of the 13 TSX sub-groups were lower. Health-care stocks were off 4.6% Tuesday, followed by financials, 3.1% lower, and real-estate stocks were down 3%.
The TSX Venture Exchange was down 4.17 points to 824.07 while the Nasdaq Canada index picked up 6.49 points to 386.38
ON WALLSTREET
The Dow Jones Industrials index stumbled 37.27 points to 6,726.02, to lows it hadn’t seen since April 25, 1997.
The Standard & Poor’s 500 index slid another 4.49 points to 696.33, ending at the lowest point since Oct. 10, 1996, while the NASDAQ composite index gave back 1.84 points to 1,321.01.
On the economic front, pending home sales sank to a record low in January, according to a National Association of Realtors report released Tuesday morning. Sales fell 7.7% versus forecasts for a drop of 3.5%, according to a consensus of economists surveyed by Briefing.com.
Sales rose a revised 4.8% in December.
Major automakers' U.S. sales continued their deep slump in February, with Ford Motor Co.'s U.S. sales down 48% from a year earlier, while Toyota Motor Corp. posted a 40% drop.
Sales at General Motors Corp. plunged 52.9%. Still, GM shares rose eight cents to $2.09 U.S. while Ford shares were off a cent to $1.87 U.S.
Federal Reserve Chairman Ben Bernanke was testifying before the Senate Budget Committee on economic and budget challenges. In prepared remarks, he urged lawmakers to move aggressively to get the economy out of its slump, even if it balloons the federal deficit.
Citigroup's CitiMortgage will lower home loan payments for three months and waive fees for some borrowers who are unemployed. The troubled financial company has received billions in federal aid and on Friday made a deal for the government to control as much as 36% of Citi's common stock. Shares rallied 6%.
Blockbuster has hired lawyers to consider a possible bankruptcy filing, Reuters said Tuesday. Blockbuster shares fell 77% through the afternoon before being halted, pending an announcement.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.9% from Friday's 3.01%. Treasury prices and yields move in opposite directions.
The April crude contract edged up 40 cents to $40.55 U.S. a barrel on the New York Mercantile Exchange.
The April bullion contract on the Nymex fell $26.40 to $913.60 U.S. an ounce.
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