The S&P/TSX composite index was trading deep in the red today -- down 420.51 points to 12,088.20 -- as investors bailed out of stocks amid renewed setbacks about the American bailout plan while in Canada RIM shares took a hit after reporting earnings that fell short of market expectations.
Research In Motion fell $27.79 or 27.51 percent to $72.21 after RIM fell short of market expectations with a quarterly profit of US$495.5 million on revenue that nearly doubled from a year ago to US$2.58 billion. Earnings per share of 86 cents missed the analyst consensus expectation by a penny
Sun Life Financial Inc. shares were down $2.38 to $37.11 after it disclosed it has $270 million in bond exposures to Washington Mutual. Sun Life, Canada's third-largest insurance company by revenue, said it expects to take a charge against its third-quarter earnings, the amount of which will be determined later.
On the data front -- the average weekly earnings of Canadian employees increased by 0.3 percent during July to $791.89, up by 2.6 percent from a year earlier, Statistics Canada reports. The number of employees increased by 42,900 or 0.3 percent in July over June, and was higher by 1.8 percent compared with July 2007.
Down south -- the Bureau of Economic Analysis released its final reading on second-quarter gross domestic product, downwardly revising the figure to show growth of 2.8 percent from April to June. The preliminary number had been 3.3 percent.
The Canadian dollar, meanwhile, was trading up 0.003 of a cent at 96.83 cents.
BAYSTREET
Two of the TSX sub-groups traded higher today -- telecom issues were ahead 0.36 percent followed by a 0.32 percent rise in health-care issues.
COMEX gold for December delivery rose $6.50 to $888.50 US an ounce. Like oil, gold prices had also rallied during the biggest periods of unrest over the last few weeks.
On the downside -- tech stocks shed 7.90 percent; energy issues were off 3.33 percent and mining stocks fell 1.79 percent.
Meanwhile, the TSX Venture Exchange dipped 25.04 points to 1,515.64 while NASDAQ Canada stocks were down 205.50 points at 737.44.
ON WALLSTREET
Stocks made a late-session run at the end of a tough session Friday, with bank stocks rising as investors bet that some form of the proposed $700 billion bank rescue plan will go through, despite the current gridlock.
The Dow Jones Industrial Average, down more than 100 points at the outset, was recently off 20 points at 11,002. The S&P 500 was losing 11 points at 1198, and the Nasdaq was weaker by 27 points to 2159.
Stocks tumbled through the afternoon on worries about the passage of the $700 billion bank bailout plan amid opposition from House Republicans. Also dragging on stocks: news that JPMorgan Chase bought Washington Mutual after it was seized by federal regulators in the biggest bank failure in U.S. history.
However, stock declines eased up as the day progressed and bailout talks were restarted. Late Friday afternoon, a White House spokesperson hinted that a deal could be in place by Monday, Reuters reported.
Federal regulators seized WaMu Thursday night and sold its banking assets to JP Morgan Chase in a $1.9 billion deal. The deal also includes JP Morgan raising $10 billion in stock, $2 billion more than initially announced.
The collapse was the biggest bank failure in history and marks the second storied Wall Street firm bought by JP Morgan this year, following Bear Stearns in March. The government also negotiated that deal.
KB Homes offered little hope for the housing sector. The homebuilder lost $144.7 million, or $1.87 a share, in the third quarter, down from a loss of $35.6 million, or 46 cents a share, in the year-ago period. The firm said its sales fell sharply as inventories jumped. ''Market fundamentals appear unlikely to improve significantly in the near term, as foreclosures continue to rise, housing inventory overhang remains at historically high levels and mortgages have become more difficult to obtain,'' Jeffrey Mezger, president and chief executive, said in a statement.
Long-term Treasury prices rose Friday, lowering the yield on the benchmark 10-year note to 3.82 percent from 3.85 percent late Thursday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for November delivery settled down $1.13 at $106.89 a barrel on on the New York Mercantile Exchange.
Oil prices had plummeted over $55 after peaking at $147.27 a barrel on July 11, as investors bet that sluggish global growth will diminish oil demand. But prices have soared in the last few weeks as the financial crisis has intensified and investors sought to put their money into hard assets.
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