The Toronto stock market lost much of its strength Monday, retreating alongside indexes around the world as investors worry that American consumers are unable to give much support to an economic recovery.
The S&P/TSX Composite Index ended Monday down 314.75 points, or 2.9%, to 10,533.36, having topped the 11,000 mark only a matter of days ago.
The TSX energy sector fell as EnCana Corp. dropped $1.44 to $55.12 while Suncor Inc. lost $1.41 to $34.43.
Economic concerns also forced down other commodity prices with the December gold contract down substantially while September copper lost six cents to $2.77 U.S.
The gold sector lost with Goldcorp Inc. down $1.14 to $37.87.
The base metals sector lost ground as Teck Resources lost $1.24 to $27.76 while HudBay Minerals was 24 cents lower to $8.61.
The financials sector was down as Royal Bank declined $1.37 to $49.99 while Manulife Financial lost 72 cents to $21.61.
Other market heavyweights pressuring the TSX included Research In Motion Ltd. down $2.00 to $78.29 as American business magazine Fortune named the BlackBerry-maker the world’s fastest-growing company while Potash Corp. fell $4.67 to $100.83.
Shares in fertilizer giant Agrium Inc. were down $2.69 to $50.56 after it said Monday it is extending the expiry date of its hostile takeover bid for U.S.-based CF Industries Holdings Inc.
The $4.26-billion deal, which offers $40 U.S. in cash plus one Agrium share for each CF share, will now expire on Sept. 22.
Shares pharmaceutical company Aeterna Zentaris Inc. tumbled more than 62% Monday after it said it has hit a snag in the development of prostate treatment drug cetrorelix pamoate. Its shares fell $1.93 to $1.18.
In other earnings news, high-hazard protective equipment maker Allen-Vanguard Corp. said Monday impairment charges contributed to widening losses in the third quarter while a delay of some U.S. programs led to revenue levels that fell short of expectations.
The company turned in a net loss of $99.2 million for the quarter ended June 30, almost tripling year-earlier losses of $36.6 million. Its shares grew half a cent, or 4.2%, to 12.5 cents.
The Canadian dollar slumped 0.67 cents, at 90.32 cents U.S.
ON BAYSTREET
All 14 TSX subgroups started down and stayed down Monday. Metals and mining were the worst-off group, descending 4.6%, global base metals losing 4.5% of its strength, while materials were off 4.1%.
The TSX Venture Exchange stumbled 33.60 points, to 1,159.82, while the Nasdaq Canada Index let go of 24.18 points to 704.00.
ON WALLSTREET
In New York, stocks slumped Monday, falling for the second straight session, as worries that nervous consumers will pressure a fragile recovery dragged stocks lower after a five-month advance.
The Dow Jones Industrials shed 2%, or 186.06 points, to greet the bell at 9,135.34. The S&P 500 index skidded 24.36 points to 979.73. The Nasdaq composite index moved lower by 54.68 points to 1,930.84.
Both the Dow and S&P 500 closed at three-week lows, the Nasdaq at a one-month low.
A roughly five-month rally hit a roadblock last week after a worse-than-expected consumer sentiment report Friday. Signs that the economy is stabilizing -- combined with extraordinary amounts of fiscal and monetary stimulus -- have more or less lifted stocks since March, with the S&P 500 gaining 50%.
In the last month alone, the S&P 500 gained 15%. After such a run, experts said, a pullback was predictable, but it's unlikely to signal a bigger retreat.
Meanwhile, concerns about consumers could limit the pace of the economic recovery.
While the housing and manufacturing sectors have started to stabilize, a weak labour market and higher oil and gas prices have kept consumers on the sidelines. With consumer spending fueling roughly two-thirds of economic growth, participation is necessary for a bigger economic recovery to take hold.
Underscoring the weakness in consumer spending, home improvement retailer Lowe's on Monday reported a worse-than-expected drop in second-quarter profit. Lowe's also issued a second-half outlook that is short of analysts' estimates. Shares plunged 9.7% and dragged on other retailers.
Home Depot and other retailers are due to report results later in the week.
Stock declines Monday were broad-based, with 27 of 30 Dow stocks sliding, led by IBM, Boeing, Chevron Exxon Mobil and 3M.
The hard-hit manufacturing sector continues to show signs of improvement. On Monday, the Empire State Manufacturing survey, a measure of activity in the New York area, rose to 12.1 in August versus a reading of negative 0.6 in July, according to the Federal Reserve Bank of New York. Any reading that is positive shows expansion in the sector.
Treasury prices leaped, lowering the yields on the 10-year note to 3.46%, from Friday’s 3.57%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil subsided 76 cents to $66.74 U.S.
Gold prices headed downward $13 to $936 U.S. an ounce.
