Stock markets pulled back Monday as a rush of quarterly earnings reports and consolidation news couldn't sustain a six-week-old rally.
Toronto's S&P/TSX composite index plummeted 311.50 points to end the day at 9,126,15.
The shifts came at the start of the busiest week yet for results from the first three months of the year. After gains of about 25% on major indexes since early March, investors are asking whether markets have risen too quickly.
On the TSX, Precision Drilling Trust units lost 8% to $4.52 on news that an Alberta government investment vehicle is taking a 15% stake in the oilfield services trust. The $380-million financing is to enable Precision to restructure debt.
In Canadian corporate news, Timminco Ltd. shares lost 38% to $2.36 after the company said some customers for its solar-panel-grade silicon are asserting that their contracts have been terminated and they want their deposits back.
Timminco also is considering a $15-million equity issue, with majority shareholder AMG Advanced Metallurgical Group NV buying between half and all of the private placement.
Martinrea International Inc. is taking advantage of the insolvency of SKD Co. to pay $3 million for assets which in better times produced $125 million in annualized revenue. The auto parts maker's stock gained a penny to $3.91.
Economically speaking, the Bank of Canada will move quickly to implement extraordinary monetary policies and focus on limited purchases of government debt and commercial paper, a Bloomberg survey of economists showed.
Governor Mark Carney may adopt so-called quantitative and credit easing policies by July, injecting between $10 billion and $50 billion into the economy, according to a survey of 27 economists taken from April 8 to April 16. The measures will last about a year, the analysts said.
The Canadian dollar lost 1.60 cents to 80.73 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, 11 were in negative country, weighed by metals and mining, plunging 10%, energy stocks, plummeting 6.2% and financials, off 5.2%.
The two groups in the black were gold, up 6.6%, and materials, advancing 2.6%.
The TSX Venture Exchange fell 13.80 points to 975.43 while the Nasdaq Canada Index tumbled 28.20 points to 619.06
ON WALLSTREET
The Dow Jones Industrials average tanked 289.60 to end the day’s trading at 7,841.73.
The S&P 500 index subsided 37.21 points to 832.29, while the Nasdaq gave back 64.86 points to 1,608.21.
U.S. oilfield service provider Halliburton Co. said its first-quarter earnings tumbled 35% to $378 million U.S.. Oil and gas producers, stung by dropping prices, cut back on exploration and drilling, and Halliburton provided a poor industry outlook for the coming quarters.
Bank of America said it earned more than expected in the first quarter, but also set aside $13.4 billion U.S. to cover losses on souring debt. Bank of America shares lost 24%. Citigroup, Wells Fargo, JPMorgan Chase and American Express were among the other bank shares falling.
Hasbro Inc. fell 2.1% after America's second-largest toymaker said first-quarter profit fell 47% because of a stronger dollar and reduced retailer inventories.
U.S. company Oracle Corp. has said it is buying Sun Microsystems Inc. in a cash deal valued at $7.4 billion U.S.
In the drugs sector, British firm GlaxoSmithKline agreed to pay up to $3.6 billion U.S. for independent skincare specialist Stiefel Laboratories. Stiefel is partly owned by private equity firm Blackstone Group. Drug maker Eli Lilly's earnings also beat estimates.
PepsiCo offered $6 billion U.S. to buy out shareholders of its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. The soft drink maker also announced better-than-expected quarterly earnings. Results from IBM and Texas Instruments were due after the close.
On the economic front, word came out Monday morning that the U.S. recession may continue though the summer, though its intensity could ease. The Conference Board said the index of leading economic indicators fell 0.3% in March, following an upwardly revised dip of 0.2% in February.
Building permits were the largest negative contributor in March, while the real money supply was the largest positive contributor.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.84% from 2.94% Friday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for May delivery slumped $4.45, or nearly 9%, to settle at $45.88 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $19.60 to settle at $887.50 U.S. an ounce
