The Toronto stock market was lower Tuesday with losses spread across most sectors as relief over the rise of the U.S. debt ceiling was muted by fresh worries about American economic weakness.
The S&P/TSX Composite Index dumped 193.91 points, or 1.5%, to end the day at 12,752.32
The Canadian dollar dropped 0.39 cents to 104.12 cents U.S.
Canadian investors returning to trading following the August long weekend faced U.S. data released Monday showing the manufacturing sector slowed to within a whisker of slipping back into contraction.
The Institute for Supply Management’s index on the sector fell to 50.9 during July from 55.3 the previous month, raising worries that the economic weakness seen in the first half of the year was not just temporary.
Extendicare Real Estate Investment Trust units tumbled $1.92 or 18.9% to $8.26. It said Monday that cuts to Medicaid payments for seniors’ care in the United States will have a "significant and immediate" impact.
Investors also kept a wary eye on the European government debt crisis as Italian and Spanish markets were slammed by investor worries that an economic slowdown will hurt their chances of dodging Europe’s spreading debt crisis.
The yield for the Spanish 10-year bond rose to 6.45%, the highest since the euro was created, before easing back slightly to 6.39% by midday. And Italy’s equivalent yield jumped to 6.18%, above where it was before July 21.
The TSX financials sector was a major decliner, with Royal Bank down 99 cents to $50.41 while CIBC fell $1.62 to $71.36.
The tech sector also weighed, with Research In Motion Ltd. down 74 cents to $23.19.
The energy sector slid as Canadian Natural Resources gave back $1.46 to $37.12 while Suncor Energy was down $1.36 to $35.26.
Metal prices drifted lower with copper down two cents at $4.39 U.S. a pound, while the base metals sector moved down. The ISM report pushed the metal down seven cents Monday, despite other data showing a better than expected Chinese Purchasing Managers report for July. Teck Resources lost $2.39 to $44.95 and First Quantum slipped $10.71, or 8.1%, to $121.75.
Industrial stocks were also lower as Canadian National Railways dropped $2.03 to $69.61 while Bombardier Inc. lost 23 cents to $5.55.
Among gold plays Goldcorp Inc. advanced 73 cents to $46.42 and Barrick Gold Corp. climbed $1.10 to $46.65.
On the earnings front, shares in food company Saputo Inc. declined $2.70 or 6% to $42.05 after the Montreal-based company reported that first quarter profits rose 13.3% to $126.6 million from $111.7 million a year ago. Revenue increased 14.1% to $1.64 billion.
Molson Coors Brewing Co. said Tuesday that its profit fell 6% to $222.8 million U.S. in the second quarter, as increased prices and cost cuts were mostly offset by lower sales volumes and higher commodities costs. Its shares were down 20 cents to $43.05.
Canada’s largest trucking company TransForce Inc. reported second-quarter profits of $26.2 million, helped by revenues from its recent acquisitions. Revenue was up 31% to $650.8 million, but its shares stumbled 26 cents to $13.76.
ON BAYSTREET
The TSX Venture Exchange sifted off 0.25 points to 1,978.85 while the Nasdaq Canada index backpedaled 13.68 points to 514.78
In Toronto, all but two of the 14 subgroups were down on the day, weighed mostly by metals and mining, down 4.3%, while information technology tailed off 4.2% and global base metals collapsed 4.1%.
The two gainers were gold, up 2.8%, and materials, nudging up 0.7%.
ON WALLSTREET
In New York, stocks plunged and bond yields dropped to nine-month lows Tuesday as investors worried about the weak economy following another disappointing economic report.
The Dow Jones Industrials trundled lower by 265.87 points, or 2.2%, to 11,866.60. The Dow was dragged lower by the industrial members of the 30-member index: Alcoa, General Electric, United Technologies and Boeing
This was the eighth-straight day of declines for the Dow -- a losing streak not seen since October 2008, when the financial system was in the depths of the crisis. The Dow was also closed below psychologically-important 12,000-point mark.
The S&P 500 let go of 32.89 points to 1,254.05. The Nasdaq Composite Index moved down 75.37 points to 2,669.24.
The S&P 500 broke through several key technical resistance points as the session wore on, including the index's closely-watched 200-day moving average. The S&P is below the 1,258-point mark - making that index negative for the year.
On Tuesday, as the selloff accelerated investors quickly shifted gears and ran to traditional safe-havens: bonds and gold.
Shares of NYSE Euronext, the parent company of the New York Stock Exchange, fell 5%. The stock exchange operator posted a 19% drop in second-quarter profit, due in part to costs associated with its Deutsche Boerse merger.
General Motors said its July auto sales rose 7.6%, which was mostly in line with analysts' expectations. Shares were down 3.6%.
Meanwhile Ford posted an 8.9% increase in its July sales. While that was better than expected, shares fell 4%.
Pfizer's stock slid 4.5%, making it the worst performer on the Dow, after pharmaceutical maker posted earnings and sales that slightly beat expectations, but fell from a year earlier.
Archer Daniels Midland's stock sank 6%, after the agricultural products company posted a fourth-quarter profit that dropped 15% from a year ago, amid higher corn prices. The results were well below Wall Street's estimates.
Shares of Metro PCS plunged 35%, after the prepaid wireless provider's second-quarter earnings and sales fell short of expectations.
McGraw Hill shares jumped 7% as two activist investors continue to push for the parent company of Standard & Poor's to break the company up..
Economically speaking, the Commerce Department said personal income edged up 0.1%, while spending slipped 0.2%. Economists were expecting income and spending to rise 0.1%.
It was the first time Americans had cut spending in 20 months.
Investors will get a number of fresh data points on the economy this week, with the most
important coming Friday in the July jobs report.
The U.S. economy is expected to have created 84,000 jobs last month, according to a consensus of analysts surveyed by Briefing.com. In June, the economy added a paltry 18,000 jobs. The unemployment rate is expected to hold steady at 9.2%.
Yields on the 10-year Treasury note declined to their lowest levels since early November, hitting 2.61% after earlier nearly falling below the 2.6% level. Prices and yields move in opposite directions.
Oil for September delivery dropped $1.43 to $93.44 U.S. a barrel
Meanwhile, gold prices surged, hitting a fresh record high of $1,644.50 U.S. an ounce.
Related Stories
