The Toronto stock market lost more than 100 points in morning trading Thursday as commodity prices fell amid reports from three of the world’s largest economies showing a slowdown in manufacturing.
The S&P/TSX Composite Index plummeted 191.52 points, or 1.6%, to approach noon Thursday at 11,567.82
The Canadian dollar was down 0.74 to 97.45 cents U.S.
In corporate news, Encana Corp. will invest an additional $600 million this year — on top of its original $2.9-billion budget — to increase significantly production of valuable liquids-rich natural gas amid a prolonged downturn in the price of so-called dry gas. Stock in the company fell 7% or $1.51 to $20.62.
CIBC said it will wind up operations at its FirstLine Mortgage business after it failed to find an acceptable buyer. The big Canadian bank said Wednesday that it couldn’t find an acceptable deal after trying since March to shop its FirstLine mortgage-broker unit. Shares fell 21 cents to $72.61.
Alimentation Couche-Tard says it is looking at expanding Statoil Fuel & Retail’s reach to new markets in Europe after its purchase of the Norwegian company elicited interest from other oil brands. Couche-Tard shares were down 30 cents at $44.95.
On matters economic, Statistics Canada said this morning that retail sales swooned 0.5% in April. In volume terms, retail sales decreased 0.8%, the third decline in four months.
On the brighter side, those receiving regular Employment Insurance benefits decreased for the third straight month in April, down 28,600, or 5.3%, to 513,700.
But most eyes were focused on federal Finance Minister Jim Flaherty’s announcement that mortgage rules would be tightened for the fourth time in as many years, lowering the amortization period to 25 years from 30 years and dropping the level people can borrow against their house to 80% from 85%.
ON BAYSTREET
The TSX Venture Exchange stepped back 24.38 points to 1,230.19. The Nasdaq Canada index slid 7.25 points to 370.04
All 14 Toronto subgroups were negative by midday, led downward by energy, off 3.4%, while metals and mining fell 2.9%, and global base metals were punished 2.8%.
ON WALLSTREET
U.S. stocks faltered Thursday following reports signaling a slowdown of global economic growth. The selloff gained steam as the day progressed.
The Dow Jones Industrials got walloped 112.16 points to break for lunch at 12,712.23
The S&P 500 dipped 14.29 points, at 1,341.40. The Nasdaq Composite Index plummeted 35.54 points to 2,894.91
Shares of drugstore chain Rite Aid rose after it reported a loss of three cents U.S. a share, a bit better than the forecast of four cents U.S. a share from analysts surveyed by Thomson Reuters, or the seven cents U.S. a share it lost a year earlier.
Shares of Bed Bath & Beyond sank more than 10%, after the retailer offered disappointing guidance for the current quarter after the bell on Wednesday.
Shares of open-source software provider Red Hat fell after it posted a better-than-forecast gain in earnings late Wednesday, but reported disappointing billings for the quarter.
Food maker ConAgra posted a better-than-expected increase in operating earnings, pushing shares higher. The company said fiscal-year profit would also rise more than current forecasts. But a charge related to its pension plans resulted in it reporting a net loss.
Cigarette maker Philip Morris International, which sells the brands of Altria Group like Marlboro in overseas markets, cut its full-year earnings guidance, citing a bigger hit from currency exchange rates.
Dow component Johnson & Johnson is close to settling a probe with the Justice Department into the company's promotion of the antipsychotic drug Risperdal, which could include a payment of $1.5 billion U.S., according to a report in the Wall Street Journal.
The payment would be the largest ever for the company, according to the report, but it would avoid a felony charge that could prevent the company from selling its medicines to government health programs such as Medicare. Shares of J&J were down.
Overseas economic reports released Thursday show it's not just the U.S. where the economy is weaker than hoped.
That came on the heels of a Wednesday announcement by the Federal Reserve that it would continue helping the market, though not doing as much as many investors had hoped.
The Fed said Wednesday that it will extend Twist -- its policy of swapping short-term Treasuries in its portfolio for debt with a longer duration -- until the end of the year, in an effort to jumpstart sluggish economic growth and hiring. The Fed said it stood ready to take additional action if needed.
Economic weakness has moved around the globe. Chinese manufacturing fell to a seven-month low -- a sign that factories there are being hit by sluggish demand, according to the preliminary report of HSBC Manufacturing Purchasing Managers' Index.
Meanwhile, Europe's PMI index for June remained near a three-year low, as manufacturing output in Germany -- the most important European economy -- fell at the fastest rate in three years. It was the second straight month of decline.
Economically speaking, there were 387,000 first-time filings for unemployment benefits in the week ended June 16, little changed from the prior week but a bit above the forecast of 380,000 from the economists surveyed by Briefing.com.
Existing home sales for May came in slightly below expectations at an annualized rate of 4.55 million, according to the National Association of Realtors.
The Conference Board's Leading Economic Indicators index for May came in higher than expected, increasing 0.3%, after decreasing by 0.1% in April.
The Philadelphia Fed's manufacturing index indicated a steep decline of 16.6%, which was significantly worse than the 0.2% drop that economists predicted. A month ago that drop was 5.8%.
The price on the benchmark 10-year U.S. Treasury moved up a bit, lowering yields to 1.60% from Wednesday’s 1.64%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil fell $1.70 to $79.75 U.S.
Gold futures for August delivery dropped $44.5 to $1,571.30 U.S. an ounce.
