North American stock markets crumbled in afternoon trading while bond prices rose after a disappointing U.S. retail report left investors reassessing their optimism for a quick economic recovery.
The S&P/TSX composite index fell without a parachute Wednesday, losing 371.63 points, or 3.7% of its value, to end the day 9,706.07, out of sight of the psychologically important 10,000 level.
Investors took in a report from Statistics Canada which said that sales of new motor vehicles rose 6.3% in March, the largest monthly growth since January 2008.
On the TSX, diversified metals stocks dropped while Teck Resources Ltd. lost $2.60 to $13.49.
Energy stocks fell as the light sweet crude for June delivery moved lower.
Inventories of crude were surprisingly lower, down by 4.7 million barrels last week, according to the U.S. Energy Information Administration. Analysts were predicting an increase close to one million barrels.
The TSX gold sector was down, as Gammon Gold Inc. says its first-quarter revenues slid to $47.3 million U.S., affected by a weak gold prices and even weaker silver prices. Its shares lost 77 cents to $8.35.
Furniture retailer The Brick Group Income Fund reported a $29.3-million first-quarter loss, including $25-million non-cash intangible asset impairment charge. The results reverse a year-ago $4.4-million profit. Brick units moved ahead three cents to $1.18.
Hydrogenics Corp. trimmed losses to $4 million U.S. during the first quarter, but revenue was down 48% from a year ago, sending its stock down 12%, or eight cents to 59 cents.
Magellan Aerospace Corp. shares were up 10 cents to $1.65 after it reported first-quarter net income of $7.9 million, up from $2.1 million a year ago. Revenue rose 11.3% to $179.3 million, largely because of currency effects.
Quebecor Inc. says growth at its Videotron cable business offset a contraction in revenues and profitability at its newspapers during the first quarter of 2009. Overall revenues were up 2.2% to $896.2 million in the first quarter. Quebecor shares were up 56 cents, or 3.1% to $18.90.
Leon's Furniture Ltd. stock was flat at $9.84 per share as it reported a slight revenue decline to $195.2 million from $196.4 million. Profits were $11 million or 16 cents per common share, including $1.13 million or two cents per share.
ADF Group Inc. shares tumbled 12.5%, or 31 cents to $2.79, after the company announced it will supply fabricated steel structure for an office tower to be built in the northeastern United States, under a $22-million contract.
The Canadian dollar was down .94 cents, to 85.04 cents U.S.
ON BAYSTREET
All of the 13 TSX subgroups were negative; metals and mining the worst off, plummeting 10%, energy stocks were off 5.3%, while financials tumbled 4.9%.
The TSX Venture Exchange slipped 24.74 points to 1,053.53 while the Nasdaq Canada Index gave back 27.74 points to 665.61.
ON WALLSTREET
The Dow Jones Industrials average fell 184.22 - or 2.2% - to end trading at 8,284.89.
The S&P 500 index declined 24.43 points to 883.92, while the Nasdaq Composite Index was 51.73 points in the red, to 1,664.19.
The U.S. Commerce Department said retail sales fell 0.4% in April. Economists had forecast sales would be flat for the month. March sales figures were revised lower as well, to a decline of 1.3% from a previous estimate of a decline of 1.1%.
Consumer spending accounts for about two-thirds of economic activity.
In other economic news, March business inventories fell 1% after slipping 1.4% in the previous month. Economists expected inventories to have dropped 1.1%.
Improvement in the U.S. housing sector is also seen as a key to economic recovery, but investors got another dose of disappointing news Wednesday morning as a new report showed the number of U.S. households facing foreclosure jumped 32% in April.
More than 342,000 households received at least one foreclosure notice during the month, according to RealtyTrac Inc.
Department store chain Macy's Inc. said its first-quarter loss widened to $88 million U.S., or 21 cents per share, during the first quarter. But excluding restructuring charges, losses totaled 16 cents per share, better than analysts’ expectations for a loss of 20 cents per share.
AIG shares declined 21 cents to $1.60 U.S. as the company's CEO discussed restructuring plans at a House hearing about how the company plans to pay back billions in government loans.
Intel was fined a record $1.45 billion U.S. by the European Union for allegedly violating antitrust laws. The chipmaker said it will appeal the decision. Late Tuesday, Intel CEO Paul Otellini told investors that second-quarter orders have been better than expected. Shares were off eight cents to $15.13 U.S..
Hard drive manufacturer Seagate Technology said it would reduce its staff by 1,100 jobs, or 2.5%, as part of its ongoing effort to return to profitability. Its shares closed 36 cents, or 4.9%, to $6.98 U.S.
GM shares started the day with another drop on concerns that it will have to file for bankruptcy, with the stock touching $1 per share, the lowest level since 1933. But the automaker rallied in the afternoon to finish six cents higher at $1.21 U.S.
Freddie Mac posted a $9.9-billion U.S. quarterly loss after the market close Tuesday and also asked the government for another $6.1 billion U.S. in aid.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.10% from 3.17% Tuesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for June delivery fell 83 cents to settle at $58.02 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery climbed $2 to settle at $925.90 U.S. an ounce.
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