Toronto’s stock market tumbled more than 200 points Tuesday as commodity prices retreated amid U.S. earnings disappointments and a fresh round of worry centred on Europe's debt crisis.
The S&P/TSX composite plummeted 220.32 points, or 1.8%, to greet noon at 12,183.22
The Canadian dollar lost 0.13 cents to 100.67 cents U.S.
The news was more positive from Canadian National Railways, which said after the close Monday it was maintaining its earnings growth outlook for 2012 despite anticipating a difficult end to the year due to a weak economy.
CN said it earned $664 million, or $1.52 per diluted and adjusted share, for the period ended Sept. 30, beating analyst estimates by a penny. But its shares were down $1.13 to $85.94.
Expectations for this earnings season were already muted with analysts expecting the first
The financial sector fell amid major acquisition news from the Canadian banking sector.
Royal Bank of Canada confirmed it will acquire the Canadian auto finance and deposit business of Ally Financial Inc. The bank says its net cost for the deal will be about $1.4 billion but its shares got caught in the overall market downdraft and lost $1.70 to $56.90.
And U.S. discount retailer Target is selling its credit card portfolio to TD Bank Group for about $5.9 billion. TD also agreed to a seven-year deal to underwrite, fund and own the retailer’s future credit card and Visa receivables in the United States. TD stock shed $1.29 to $81.63.
The base metals sector dropped as copper prices fell back with the December contract on the Nymex down seven cents at $3.55 U.S. a pound. Teck Resources shed 96 cents to $30.37.
The energy sector lost ground as Suncor Energy gave back 95 cents to $32.43.
Among gold plays, Goldcorp Inc. faded 95 cents to $42.43.
Speaking of things economic, figures released this morning by Statistics Canada revealed that retail sales rose 0.3% to $39.1 billion in August. However, factoring out the effects of price changes, particularly higher food and gasoline prices, retail sales in volume terms declined 0.3%.
Moreover, the Bank of Canada kept its trendsetting policy interest rate at 1% for the 17th consecutive time today, but signaled that it’s worried about household debt.
ON BAYSTREET
The TSX Venture Exchange went down 23.14 points to 1,285.27
All 14 Toronto subgroups were down midday, weighed mostly by global base metals and the metals and mining group, each of which tailed off 3.1% while energy stocks suffered 2.5%.
ON WALLSTREET
A selloff on Wall Street gained momentum Tuesday, with the Dow Jones Industrial Average dropping 240 points after three Dow components issued disappointing earnings and forecasts.
The Dow retreated 245.40 points, or 1.8%, to 13,100.50
The S&P 500 index ducked back 24.05 points to 1,409.77, while the Nasdaq lost 31.13 to 2,985.83
Even with the sharp declines, all three indexes are still up between 7% and 14% this year.
With no data on the U.S. economy, investors were focused on the latest quarterly reports from Corporate America.
Three major U.S. industrial companies missing expectations is a worrisome sign for the global economic recovery, which remains shaky.
Shares of DuPont fell 8% after the Dow component reported weaker-than-expected quarterly earnings and announced plans to cut 1,500 jobs worldwide. Another Dow component, United Technologies, reported better-than-expected earnings but missed on revenue and lowered its revenue forecast for next year.
Economic bellwether and Dow component 3M reported earnings that were in line with forecasts, but the company missed revenue estimates and pulled back on its guidance.
UPS, another economic bellwether, reported results that were roughly in line with expectations.
After the bell, Facebook and Netflix will release their reports.
Analysts at S&P Capital IQ predict third-quarter earnings for companies in the S&P 500 will grow by just 0.04% overall this quarter, the worst since the third quarter of 2009.
In addition to the earnings news, Apple is expected to unveil its iPad mini at an event in California at 1 p.m. ET.
The price of the benchmark 10-year U.S. Treasury gained, lowering the yield to 1.75% from Monday’s 1.80%. Treasury prices and yields move in opposite directions.
Oil prices fell $2.50 to $86.15 U.S. a barrel.
Gold prices shed $17.30 to $1,709 U.S. an ounce.
