The Toronto Stock Exchange saw a near-triple-digit drop by noon on Tuesday, as commodity prices fell amid weak data out of China that could indicate a decline in demand for resources.
The S&P/TSX Composite Index fell 85.91 points by midday to 12,393.79.
The Canadian dollar faltered 0.64 cents at 100.66 cents U.S.
The selloff came amid some dealmaking in the agricultural and financial sectors.
Grain-handling company Viterra Inc. said it has agreed to be acquired by Switzerland-based Glencore International in a deal valued at $6.1 billion or $16.25 per share.
The Regina-based company says the transaction also includes an agreement that would see Calgary-based Agrium Inc. and privately held Richardson International, based in Winnipeg, buy the majority of Viterra’s Canadian assets for $2.6 billion in cash.
Viterra shares fell eight cents to $15.89 while Agrium shares added $1.25 to $86.99.
Meanwhile, the Royal Bank of Canada said it is acquiring the Latin American, Caribbean and African private banking business of Coutts, the wealth division of Royal Bank of Scotland Group, for an undisclosed price. RBC shares fell 39 cents to $57.87 amid a broad decline in the financial sector.
ON BAYSTREET
The TSX Venture Exchange skidded 23.30 points to 1,575.48, while the Nasdaq Canada index tottered 6.63 to 414.51
All 14 Toronto subgroups remained in the red by noon. Global base metals suffered 2.1%, metals and mining issues slid 1.9%, and information technology stocks lost 1.3%.
ON WALLSTREET
In New York, stocks fell Tuesday as concerns about slowing growth in China overshadowed an upbeat report on the U.S. housing market.
The Dow Jones Industrials remained negative by 70.50 points to 13,168.60.
The S&P 500 gave back 7.80 points to 1,401.95, while the Nasdaq flopped 22.05 points to 3,056.27.
Shares of economically sensitive companies in the industrial and materials sector led the retreat, with Caterpillar, Alcoa and Chevron down sharply. But shares of Bank of America, Cisco and Home Depot bucked the trend.
Jefferies Group posted quarterly earnings of 33 cents U.S. per share on strong gains in its investment banking business, topping analyst estimates. The firm also beat on revenue.
Shares of Tiffany & Co rose after the luxury jeweler reported sales of $1.2 billion U.S. -- in line with forecasts -- and issued an upbeat outlook.
Shares of Adobe Systems fell after the software maker issued earnings and guidance in line with expectations late Monday.
Michael Kors' stock got a boost after the fashion company hiked its outlook.
Oracle is slated to report earnings after the bell Tuesday. The tech firm is expected to earn 56 cents a share on $9 billion U.S. of revenue.
The selling came despite U.S. government data that showed a big increase in requests for building permits, although initial constructing of new homes declined in February.
With housing in focus, shares of homebuilder KB Home advanced and shares of PulteGroup also climbed.
Meanwhile, Federal Reserve chairman Ben Bernanke will deliver a lecture at later Tuesday in Washington.
Treasury Secretary Tim Geithner told lawmakers that steps taken by European policy makers have helped alleviate tensions in the global financial markets. Geithner said more needs to be done, but he reiterated that the U.S. remains opposed to providing additional resources for the International Monetary Fund.
Prices for industrial commodities fell on worries that China, the world's second largest economy, is headed for a slowdown. Oil prices sank 1.6% and copper fell 2%.
Chinese officials released a statement announcing plans to hike gas prices, and government statistics showed that home prices were down in major cities across China.
Investors were also rattled by reports that the chief executive of mining giant BHP Billiton said China's steel production is slowing, raising fears about the nation's property market.
On the economic beat, future home construction showed signs of strength in February, with permits climbing 5.1% to annual rate of 717,000, topping analyst predictions of 695,000.
Housing starts dipped 1.1% to 698,000, below estimates.
The price on the benchmark 10-year U.S. Treasury gained back lost ground, pushing the yield lower to 2.35% from 2.38% Monday. Treasury prices and yields move in opposite directions.
Oil for February delivery slid $1.65 to $106.44 U.S. a barrel.
Gold futures for April delivery fell $15.60 to $1,651.90 U.S. an ounce.
