The S&P/TSX composite index rallied off it's lows for the day -- but still dropped 5.30 percent or 572.92 points to 10,2306.43 -- after European governments took steps to limit the damage from the growing global financial crisis while US and Canadian markets remained under strain and oil prices sank below US$88 a barrel.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
In Canada -- Bank of Nova Scotia said Monday it planned to spend $2.3 billion in cash to buy Sun Life Financial's stake in fund manager CI Financial , the bank's latest step to expand its wealth management business.
Also -- the Jean Coutu Group has reported a summer-quarter net loss of $39.1 million, dragged down by its holding in American drugstore chain Rite Aid Corp. Revenue from Coutu's Canadian operations rose to $567.5 million in the company's second quarter ended Aug. 30, up 5 per cent from $540.3 million in the year-ago period.
In the mining group -- Coalcorp Mining Inc. was down 22 cents or 16.9 percent to $1.08 after Swiss group Pala Investments Holdings Ltd. more than doubled its stake in the company to 44 percent with a $52.9 million share purchase.
On the data front -- the value of building permits issued by Canadian municipalities plunged 13.5 percent from the previous month in August to $5.6 billion, Statistics Canada reported Monday. Analysts had expected a 1.5 percent decline in total permits during August.
The Canadian dollar, meanwhile, fell 1.33 cents to 90.98 cents US.
BAYSTREET
All of the TSX sub-groups were trading on the downside today -- energy stocks were off 8.20 percent; real-estate issues shed 6.23 percent and utility stocks fell 6.21 percent.
Gold stocks were also beaten down -- falling 5.28 percent. COMEX gold for December delivery rallied $33 to $866.20 US an ounce.
Meanwhile, the TSX Venture Exchange was off 166.13 points to 1,134.10 while NASDAQ Canada stocks were down 49.54 points at 577.52.
ON WALLSTREET
Stocks plunged Monday, with the Dow down as much as 800 points during the session, as the $700 billion bank bailout plan and European government attempts to prop up faltering banks failed to comfort panicky investors.
The Dow Jones Industrial Average broke below 10,000 for the first time since October 2004, falling as much as 800 points during the session. In the end, however, the index closed with a loss of 365.90 points, or 3.5 percent, at 9,959.48. The S&P 500 gave back 42.26 points, or 3.8 percent, to 1056.97. The Nasdaq dropped 83.12 points, or 4.3 percent, to 1864.27.
The Federal Reserve took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.
Meanwhile, The Wall Street Journal said that Treasury Secretary Henry Paulson would appoint adviser Neel Kashkari to supervise the $700 billion bailout program for the financial system.
In corporate news -- Bank of America announced it would modify about 400,000 mortgages to help borrowers who had taken out loans from Countrywide Financial, which BofA acquired on July 1.
Insurance company Hartford Financial said it garnered a $2.5 billion investment from Allianz, is reducing its dividend and will register a third-quarter loss.
Drug company Eli Lilly said it would buy ImClone, the biotech that produces colon cancer treatment Erbitux, for $6 billion.
Online auctioneer eBay said it would cut one-tenth of its workforce, or 1,000 employees, to streamline its business.
Longer-term U.S. Treasury securities were climbing in price. The 10-year was up 1-12/32 to yield 3.44 percent, and the 30-year was climbing 2-12/32, yielding 3.96 percent.
U.S. light crude oil for November delivery settled down $6.07 to $87.81 US a barrel on the New York Mercantile Exchange.
