The Toronto stock market tumbled more than 150 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 finished off its lows of the day, but still fell 177.70 points, or 1.4%, of breakeven at 12,225.84
The Canadian dollar lost 0.05 cents to 100.75 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 78 cents to $86.29
Expectations for this earnings season were already muted with analysts expecting the first year-over-year drop since 2009.
Analysts at Credit Suisse said in a report Tuesday that "roughly 25% of the way through the U.S. reporting season, annual earnings per share growth is broadly flat."
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 $1.66, or 2.8%, to $56.94.
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 83 cents to $82.09.
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 79 cents, or 2.5%, to $30.54.
The energy sector lost ground as Suncor Energy gave back 72 cents, or 2.2%, to $32.66.
Among gold plays, Goldcorp Inc. faded $1.13 to $42.25
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 18.91 points to 1,289.50
All 14 Toronto subgroups were down on the day, weighed mostly by global base metals, down 2.9%, while the metals and mining group tailed off 2.6% while gold stocks doffed 2.4%.
ON WALLSTREET
U.S. stocks pared earlier losses Tuesday afternoon, though the Dow Jones Industrial Average remained down more than 200 points after three Dow components issued disappointing earnings and forecasts.
The Dow retreated 243.36 points, or 1.8%, to 13,102.50
The S&P 500 index ducked back 20.66 points to 1,413.16, while the Nasdaq lost 26.49 to 2,990.46
Even with the day's sharp declines, all three indexes are still up between 7% and 15% this year.
Tuesday's selloff came after three major U.S. industrial companies missed earnings expectations, igniting worries that the global economy might be on shakier ground than previously suspected.
Shares of chemicals maker DuPont fell nearly 9% after the Dow component reported weaker-than-expected quarterly earnings and announced plans to axe 1,500 jobs worldwide.
United Technologies, provider of technology for aerospace and building industries and a Dow stock, reported better-than-expected earnings but missed on revenue and lowered its revenue forecast for next year.
3M, which makes scotch tapes and Post-it notes and is considered an economic bellwether, reported earnings that were in line with forecasts, but the company missed revenue estimates and pulled back on its guidance.
UPS, another global economic bellwether, reported results that were roughly in line with expectations.
After the bell, Facebook and Netflix will release their reports.
In addition to the earnings news, Apple unveiled a 7.9 iPad mini, half the size and weight of its original tablet at an event in California Tuesday afternoon. The tech giant also introduced a new 13-inch MacBook Pro. Despite the news, shares of the company were down nearly 2%.
The price of the benchmark 10-year U.S. Treasury gained, lowering the yield to 1.76% from Monday’s 1.80%. Treasury prices and yields move in opposite directions.
Oil prices fell two dollars to $86.65 U.S. a barrel.
Gold prices shed $18.70 to $1,707.60 U.S. an ounce.
