The S&P/TSX composite index closed Thursday's session in the red -- down 53.88 points to 9,269.97 -- led by a drop in gold stocks -- as traders took in a fresh round of dismal economic data out of Canada and the US while the price of oil took a hit following a bigger-than-expected gain in crude and gas supplies.
In Canada -- manufacturing sales declined 3.7 percent to $52 billion in August, erasing most of the gains from the previous two months. The largest contributor to the decrease was the petroleum and coal products industry, where sales have fallen by nearly $1 billion in two months.
Also -- the Bank of Canada will likely lower its policy interest rate by half a percentage point next week, the Royal Bank of Canada's economics department said Thursday. Citing ''a deteriorating outlook for the U.S. economy, falling commodity prices and persistent financial market volatility,'' RBC said downside risks are increasing for Canada's economic outlook.
On the earnings front -- NovaGold Resources Inc. reported its third quarter earnings of $16.7 million or $0.16 per share, compared to a loss of $4.2 million or $0.04 per share in the same quarter last year. Quarterly revenues declined to $1.5 million from $2.2 million in the year-ago quarter. The company attributed the decrease in revenues mainly to decreased interest income due to lower average cash balances in 2008 as compared to the corresponding period in 2007.
Down south -- the Department of Labor's September consumer price index showed that prices were unchanged for the month, better than the 0.1 percent increase expected by economists. The core rate of price increases came in at 0.1 percent, below a 0.2 percent increase in August.
The Department of Labor also reported that, for the week ended October 11, jobless claims declined by 16,000 to 461,000, below a consensus estimate of 470,000 and down from 477,000 the previous week.
Industrial production numbers from the Federal Reserve showed a 2.8 percent decline in production, the largest decline since December 1974. The Fed estimated that hurricanes accounted for 2.25 percent of the decline.
Finally -- conditions in the manufacturing sector in the Philadelphia region deteriorated significantly in October, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed diffusion index fell to negative 37.5 in October from positive 3.8 in September. Readings below zero indicate contraction. The decline was much larger than expected.
The Canadian dollar, meanwhile, was trading ahead 0.78 of a cent to 84.67 cents US.
BAYSTREET
Six of the TSX sub-groups traded higher today -- real-estate issues were up 2.03 percent followed by a 1.96 percent gain in energy issues and a 1.95 percent rise in health-care stocks.
On the downside -- gold stocks fell 9.50 percent, mining issues shed 1.79 percent and consumer staples stocks dipped 1.17 percent.
COMEX gold for December delivery plunged $34.50 to $804.50 US an ounce. A variety of other commodities declined as well.
Meanwhile, the TSX Venture Exchange slipped 53.42 points to 937.79 while NASDAQ Canada stocks were up 25.54 points at 572.52.
ON WALLSTREET
U.S. stock indexes on Thursday trimmed losses but continued to extend the prior day's rout, after a measure of factory activity in the Philadelphia region swung sharply lower, confirming bleak views about the health and direction of the economy.
The Dow Jones Industrial Average, which swung as low as 380 points to the downside, ended the day near its session high, up 401.35 points, or 4.7 percent, at 8,978.94. The S&P 500 climbed 38.54 points, or 4.2 percent, to 946.37. The Nasdaq soared 89.38 points, or 5.5 percent, to 1,717.71.
In corporate news -- Swiss bank UBS received a $5.3 billion cash injection from the Swiss government in exchange for a 9 percent equity position in the company. UBS and the Swiss National Bank also reached an agreement for UBS to transfer up to $60 billion of currently illiquid securities and other assets from its balance sheet to a separate fund.
Bloomberg reported that Citadel Investment Group's largest hedge fund lost as much as 30 percent this year on bad bets in convertible bonds, stocks and corporate debt.
Quarterly results from financial firms continued to reflect the impact of the credit crunch. Citigroup reported a third-quarter loss that was narrower than the Street had forecast.
Merrill Lynch, meanwhile, posted a widened loss that included a $2.5 billion payment related to a stock offering and a $425 million expense tied to settlement of a government approval of its dealings in auction-rate securities.
Bank of New York Mellon and BB&T announced declines in profit of 53 percent and 19 percent, respectively.
In technology, Microsoft CEO Steve Ballmer said that an acquisition of Internet portal Yahoo! would make economic sense. Yahoo! had earlier turned down a buyout offer from Microsoft for $33 a share.
Longer-dated U.S. Treasury securities were mixed. The 10-year note was up 3/32, yielding 3.93 percent, and the 30-year was down 18/32, yielding 4.22 percent. The American dollar was gaining on the euro and pound but flat against the yen.
Oil prices continued to slide after the government's weekly inventory report showed a bigger-than-expected gain in crude and gas supplies.
U.S. light crude oil for November delivery fell $4.65 to settle at $69.85 US a barrel on the New York Mercantile Exchange. The contract fell as low as $68.57, the lowest level since August 2007.
For the week ended Oct. 10, crude oil inventories rose by 5.6 million barrels, or 1.9 percent, to 308.2 million barrels, which is 0.6 percent below year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.
Analysts had expected a jump of 3.1 million barrels, according to a survey by Platts.
