Canadian stocks fell hard Wednesday, dragged down by energy and mining stocks, as worries about Spain and Greece rattled global markets.
The S&P/TSX Composite Index gave back 176.04 points, or 1.5%, to finish the day at 11,433.26.
Among large-cap stocks, shares of Canadian Natural Resources Ltd. fell 6.7% to $29.89, EnCana Corp. shares declined 3.9% to $20.44, Suncor Energy Inc. shares dropped 3.6% to $28.13, and Talisman Energy Inc. fell 4.2% to $10.62.
Shares of Teck Resources Ltd. shed 3.8% to $31.27, Lundin Mining Corp. fell 5.8% to $4.04, Inmet Mining Corp. dropped 2.1% to $43.53., and Taseko Mines Ltd. declined 3.5% to $2.78.
The former technology giant known as Research In Motion hurtled earthward 7.3% to $10.64, amid word after the company issued a poor outlook and announced a strategic review of its business.
In earnings news, clothing retailer Reitmans reported after the close that it had a $53,000-loss in its first quarter, which compared with a $624,000 profit a year earlier. Its sales dropped by 1% to $217.1 million and same-store sales, a key metric in the retail industry, declined 0.7%
Last Thursday, investment firm Versant Partners trimmed the price target for Reitmans’ stock to $14, down $1 from the previous estimates. Reitmans (Canada) Ltd. shares were down 3.1% to $14.54.
The latest round of worry about the euro-zone has shifted to the Spanish banking sector in recent days especially after Bankia, the country’s fourth-largest lender, last week announced it needed €19 billion in state aid.
The concern is that Bankia’s woes might spread across Spain’s banking sector, which has suffered badly from the collapse of the construction sector.
Nervous investors sent Spain's borrowing costs higher with the 10-year government bond, a key indicator of market confidence in a country’s ability to pay down its debt, getting closer to the seven per cent level which is viewed as unsustainable.
On Wednesday, the interest rate or yield on Spanish 10-year bonds shot up 25 basis points to 6.67%, matching the level it hit at the height of the euro-zone crisis late last year. The yield later fell back to hit 6.66% in afternoon trading.
Earlier Wednesday, the government denied newspaper reports that the European Central Bank had rejected a Spanish idea to finance a bank bailout and it defended the country as sound.
The Financial Times reported Wednesday the E.C.B. rejected the idea of Spain paying for the €19-billion bailout of Bankia by using government bonds, which would then be used as collateral for cash from the E.C.B.
On the economic ledger, Statistics Canada said its Industrial Product Price Index for April was unchanged. Increases in chemical products of 1.7% and petroleum and coal products of 0.4% were offset by a decline in primary metal products, which were down 2.1%. Economists expected an increase of 0.1%, following a 0.2% rise in March.
The agency also said its Raw Materials Price Index fell 2.0%, largely because of declines in mineral fuels.
ON BAYSTREET
The TSX Venture Exchange docked 19.91 points to 1,289.43. The Nasdaq Canada index declined 10.58 points to 355.77
All but one of the 14 Toronto subgroups were in the red to end the day. Energy stocks took the worst beating at 3.9%, metals and mining next at 3.1%, and global base metals tailed off 2.9%.
Only a 0.7% uprising by gold stocks kept things from being unanimous.
ON WALLSTREET
Stocks fell sharply Wednesday as worries about Europe's debt crisis, specifically the Spanish banking system, shook investor confidence.
The Dow Jones Industrials finished the session down 160.83 points, or 1.3%, to 12,419.90
The S&P 500 tailed off 17.20 points to 1,315.22. The tech-rich Nasdaq Composite Index deducted 33.63 points to 2,837.36
Alcoa, Caterpillar and Chevron were among the hardest hit as investors shunned companies in economically-sensitive industries. Bank of America was also under pressure, falling 3.5%. Meanwhile, investors gravitated towards stocks that pay dividends and are considered defensive, such as Disney and Intel
Shares of BlackBerry-maker Research in Motion tumbled on news it hired JPMorgan and RBC Capital to review its strategic options, which is generally a signal it is putting itself up for sale. The company also warned it now expects an operating loss for its fiscal first quarter, which ends on June 2.
Shares of auto parts retailer Pep Boys plunged after the company announced that its previously announced purchase by The Gores Group has been called off.
Seed and herbicide maker Monsanto raised its full-year earnings guidance to between $3.65 to $3.70 U.S. a share, up from the $2.96 U.S. a share it earned a year ago and above the most bullish forecasts of analysts surveyed by Thomson Reuters.
Shares of troubled natural gas producer Chesapeake Energy fell after Reuters reported late Tuesday that the company was preparing to meet with many of its major lenders later this week in an effort to raise the $9 billion to $10 billion U.S. needed to close a funding shortfall. The report cited people familiar with the matter.
DVR maker TiVo and movie studio Lions Gate Entertainment, which has enjoyed a hit with the movie "The Hunger Games," will report results after the close.
Economically speaking, an index of pending home sales declined to 95.5 in April from 101.1 in March, according to the National Association of Realtors. The index was expected to have increased, according to a survey of analysts by Briefing.com.
Due later this week is the May jobs report, as well as key readings on manufacturing and auto sales. Economists forecast that employers added 150,000 jobs in May, and that unemployment remained at 8.1%.
The price on the benchmark 10-year U.S. Treasury rocketed up, pushing the yield down to a record low 1.62% from 1.73% late Tuesday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil backtracked $3.37 to $87.49 U.S.
Gold futures for June delivery rose $14.70 to end at $1,563.40 U.S. an ounce.
