Stock markets are deep in the red as investors look at another figure put forward on the value of toxic assets on banks' balance sheets and the market steadies itself for potentially grim earnings reports.
Toronto's S&P/TSX composite index tumbled 191.42, to 8,824.75.
The dismal performance on markets put the four-week-old spring rally on hold for a second day, a rally that has boosted the TSX almost 17% and the Dow about 19%.
Also, a report that the International Monetary Fund was set to forecast $4 trillion U.S. in toxic assets on banks' books weighed on markets around the globe. Published by London-based paper The Times, the report underscored investors' fears that the government's recent efforts to purge banks of troublesome loans might not work.
Meanwhile, the Canadian Institute of Chartered Accountants says no changes have yet been made to mark-to-market valuation in Canada, despite new rules announced last week in the United States.
The accounting standards board is expected to make a decision that could allow banks and other institutions with devalued assets to artificially boost their worth on the market.
The TSX financial sector, up 35% over the course of the rally, moved down. Royal Bank declined 91 cents to $37.29 while Manulife Financial lost 47 cents to $16.24.
The energy sector lost as EnCana Corp. gave back $2.72 to $52.16 and Canadian Natural Resources surrendered $1.87 to $51.62.
The gold sector hiked, as Goldcorp Inc. rose 82 cents to $38.22.
The base metals sector stepped back as Teck Cominco Ltd. gave back 43 cents to $7.97.
Equinox Minerals Ltd. shares fell 32 cents or 14.75% to $1.85 after it said Monday it plans to raise about $160 million in an equity financing to fund the expansion of its Lumwana copper mine in Zambia.
Empire Co. Ltd. the owner of grocer Sobeys, said Monday that it has signed a deal with a syndicate of underwriters led by Scotia Capital Inc. to raise $125 million. The company said the underwriters have agreed to purchase, on a bought-deal basis, 2.5 million non-voting class A shares at a price of $49.75 per share. Its shares fell $5.08 to $49.70.
Shares in security firm Garda World jumped 22 cents or 13% to $1.93 after it said today it has won an extension of its contract to provide passenger and baggage security screening operations at 26 airports in Canada.
The Montreal-based company said the two-year extension is worth about $300 million in revenue
Shares in Canadian auto parts makers were lower even as Ottawa announced that help is on the way for the sector.
Industry Minister Tony Clement said Ottawa will provide an additional $700 million to Export Development Canada, a Crown corporation, which will be able to use the funds to insure accounts receivable at the suppliers.
Clement also told a news conference that Canadians need to be prepared for a possible filing under bankruptcy protection laws by General Motors, North America's largest auto maker.
Magna International declined $2.15 to $38.92 while Linamar Corp. backed off 21 cents to $2.79.
The Canadian dollar was up 0.08 cents to 80.81 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, all but one were negative. Metals and mining stocks were first down the mineshaft, down 4.3%, information technology next at 2.6%, and energy stocks, off 2.5%.
Gold was the lone holdout, advancing 1.4%.
The TSX Venture Exchange skidded 10.69 points to 955.54 while the Nasdaq Canada Index surrendered 31.79 points to 575.
ON WALLSTREET
The Dow Jones Industrials average retreated 186.28 points to end Tuesday’s trading at 7,789.56. The S&P 500 index fell 19.93 to 815.55, while the Nasdaq gave back 31.79 points to 1,561.61.
U.S. stocks fell for a second day as George Soros, the billionaire hedge-fund manager, said the rebound in equities won’t last and investors reckoned - rightly - that Alcoa Inc. would kick off the earnings season with a loss. The dollar weakened against the yen, oil fell and Treasuries gained.
After the close, Alcoa reported a first-quarter loss of 59 cents per share, wider than expected, after earning 44 cents a year earlier. Alcoa is typically the first Dow component and major company to report quarterly results.
General Motors is preparing for the possibility of filing for bankruptcy, if it can't meet the government's reorganizing deadline of June 1, according to a source familiar with the company's plans.
Economically speaking, borrowing costs slipped, following a one-month advance, the Federal Reserve said Tuesday. Consumer credit fell 3.5% in February after rising 1.8% in January.
Economists surveyed by Briefing.com thought it would fall 1.5%.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.75% from 2.87% Monday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for May delivery fell $1.90 to settle at $49.15 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $10.50 to settle at $883.30 U.S. an ounce.
