The Toronto stock market tumbled more than 250 points Wednesday with buyers discouraged by further evidence that the U.S. economy is faltering.
The S&P/TSX Composite Index fell almost without a parachute, closing 275 points, or 2%, lower to 13,527.88.
The Canadian dollar settled back 0.83 cents to 102.42 cents U.S.
The energy sector was down as oil prices further weakened following the release of the U.S. data. Canadian Natural Resources dropped $1.62 to $40.55 while Cenovus Energy dropped $1.57 to $34.23.
The metals and mining sector was down after data showed China’s manufacturing sector easing in April. The state-affiliated China Federation of Logistics and Purchasing reported that its purchasing managers’ index, or PMI, fell to 52.9 in April, down from 53.4 in March.
Signs of a weaker Chinese economy helped push the July copper contract down seven cents to $4.11 U.S. a pound. China is the world’s biggest consumer of copper. Teck Resources dropped $1.74 to $49.08 and Lundin Mining lost 14 cents to $7.06.
The financial sector was also a major weight, after two of the big Canadian banks were downgraded.
RBC Capital Markets analyst Andre-Phillipe Hardy has cut his ratings for both CIBC and National Bank to "sector perform" from "outperform". He cited long-range expectations that revenue growth will decelerate in Canada, improve in the United States, and be stronger overall in emerging markets than in North America.
CIBC gave back $2.77 to $77.54 while National Bank fell $1.92 to $79.03.
Intact Financial Corp. shares gained $4.85, or nearly 10%, to $54.62 after it announced Tuesday that it is buying insurer AXA Canada for $2.6 billion in cash.
Among gold issues, Barrick Gold Corp. dumped 34 cents to $46.05.
Further evidence that the U.S. recovery is slowing down and Europe’s debt crisis, particularly whether Greece will get more emergency loans, have dominated market attention over recent weeks and left the TSX down about 140 points during May trading.
One bright spot on the TSX was Bombardier Inc. The transportation giant reported its first-quarter profits rose to $220 million U.S. while revenues rose to $4.7 billion. The company said net income came in at 12 cents per share, two cents better than analyst forecasts.
Bombardier shares ran ahead 20 cents to $6.95 as the company also announced a firm order for 10 of its CSeries commercial aircraft, with a list price of $665 million U.S., from a Swedish leasing company.
In other corporate news, clothing retailer Reitmans (Canada) Ltd. earned $624,000 or a penny per share in the quarter ended April 30. That compared with a profit of $15.8 million or 23 cents per share a year ago. Sales in the quarter slipped to $219.3 million from $235.7 million, while same store sales fell 8.7% due to increased discounts and promotions. Reitmans shares fell $1.05 to $15.70.
Chorus Aviation Inc., the Halifax airline formerly known as Jazz Air, said Tuesday its net profits fell to $14.7 million or 12 cents a share for the three months ended March 31. That compared with earnings of $16.4 million a year earlier. Operating revenues rose nearly 25% to $443 million from $355.4 million and its shares climbed 33 cents to $5.16.
The Peruvian government has decided to suspend an environmental assessment at Bear Creek Mining’s Santa Ana property for 12 months to allow the political situation in the region to stabilize, the junior miner announced Wednesday. Its shares gained 34 cents to $6.40.
ON BAYSTREET
The TSX Venture Exchange capsized 27.05 points to 2,067.42 while the Nasdaq Canada index slid 23 points to 646.81
In Toronto, all 14 subgroups were negative by the close. Energy stocks toppled 2.9%, while global base metals and financials each tumbled 2.5%.
ON WALLSTREET
In New York, a triple dose of bad news sent stocks sharply lower Wednesday afternoon, with all three indexes set to have their worst day in months.
The day started with two disappointing U.S. economic reports that exacerbated fears about a slowdown in the recovery. And late in the trading session, Greece's debt got slapped with yet another downgrade
The Dow Jones industrial average retreated 279.65 points, or 2.2%, to end the session at 12,290.10, with all but one of the blue chip index's 30 components lagging. Bank of America, Caterpillar and Alcoa were the worst performing stocks on the blue-chip index.
The S&P 500 backed off 30.65 points to 1,314.55. The Nasdaq Composite Index collapsed 66.11 points to 2,769.19.
Stocks were under pressure right at the open following a dismal report on private sector employment, and the selling gained momentum after the U.S. manufacturing report was released.
During the last hour of trading, the slide in stocks got steeper as concerns about Europe's debt problems resurfaced. Moody's cut Greece's local and foreign bond rating by three notches to Caa1, which put the debt-ridden country's debt even further in junk territory.
Shares of Freeport McMoRan, the world's largest copper producer, tumbled nearly 4%.
The daily gyrations stem from underlying worries about where the economy is headed.
Shares of Marathon Oil slipped 3% after the Houston-based company said it is buying oil and natural gas fields within the state's Eagle Ford shale formation for $3.5 billion U.S.
Telvent 's stock jumped more than 15% following news that the energy software company will be acquired by Schneider Electric for $1.4 billion U.S.
Shares of JoS A. Bank Clothiers tumbled 14% after the men's clothing retailer's first-quarter profit failed to meet Wall Street's expectations.
Economically speaking, the first of this week's jobs-related economic reports showed that the pace of planned job cuts edged higher in May, according to a report from outplacement consulting firm Challenger, Gray & Christmas.
A separate report, also released Wednesday morning, by ADP showed private-sector payrolls added a modest 38,000 jobs in May. The number falls well below the 170,000 private sector jobs economists were expecting, according to an estimate from Briefing.com.
A CNNMoney survey of 24 economists expect the government's jobs report to show a total gain of 176,000 jobs, and a private sector gain of 193,000, while the unemployment rate edges back down to 8.9%.
Elsewhere, the Institute for Supply Management's manufacturing index for May fell to 53.5, falling short of economists forecast for a 57 reading.
The Commerce Department said construction spending rose 0.4% in April, following a 0.1% rise the previous month. Economists were expecting spending to drop 1%.
The price of the benchmark 10-year U.S. Treasury gained ground, lowering the yield up to 2.97% from Tuesday’s 3.05%. Treasury prices and yields move in opposite directions
Oil for July delivery gave up $2.69 to $100.03 U.S. a barrel.
Gold futures for August delivery rose $6.40 to $1,543.20 U.S. an ounce.
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