The Toronto stock market was sharply lower Wednesday as traders took in glum readings on American employment and speculated if they are weak enough to ensure the Federal Reserve will continue with its economic stimulus plans.
The S&P/TSX Composite Index tumbled 150.32 points, or 1.2%, to end Wednesday at 12,443.65
The Canadian dollar backtracked 0.02 cents to 96.68 cents U.S.
The industrials sector declined, with Canadian Pacific shares down $5.76, or 4.4%, to $126.
CP stock fell almost 3% Tuesday after Bill Ackman's Pershing Square Capital Management, the railway's biggest shareholder, said that it plans to sell about a third of its holding over the next six to 12 months.
Resource stocks were also weak with the base metals sector down while July copper shed early gains to close unchanged at $3.37 U.S. a pound. Teck Resources dropped 72 cents to $27.10
HudBay Minerals Inc. was three cents lower to $8.31 as the miner as downgraded by Moody's Investors Service to a corporate family rating of B3 from B2. The ratings agency says it believes HudBay will likely require additional capital to develop its various growth projects and will at least partially fund that requirement with debt.
The energy sector dropped as Cenovus Energy gave back 22 cents to $31.09.
The telecom sector was down, a day after Industry Minister Christian Paradis said Mobilicity and other new wireless carriers won't be allowed to sell spectrum to big carriers. The move was a setback for Telus, which had asked permission to acquire Mobilicity and its spectrum. Telus shares shed 65 cents to $35.16.
Financials also weighed, with TD Bank down $1.17 to $82.85.
Laurentian Bank climbed 15 cents to $44.20 as it said it is boosting its quarterly dividend by a penny to 50 cents a share as its second-quarter profit increased 4% to $35.1 million.
The gold sector also erased earlier gains, but Barrick Gold Corp. improved by 18 cents to $21.76.
In other corporate news, Penn West Petroleum Ltd. says it will be cutting its quarterly dividend by half, slashing 10% of its staff and undertake a strategic review of the company with a new president and chief executive officer in place.
The Calgary-based company says a former senior executive from Marathon Oil, David Roberts, will become the new CEO and president on June 19 and the current CEO, Murray Nunns, will retire on July 1. Its shares shed 45 cents to $10.45.
On the economic beat, Statistics Canada says municipalities issued $7 billion worth of building permits in April, up 10.5% from March and far better than the month-to-month decline that analysts had expected.
ON BAYSTREET
The TSX Venture Exchange fell 11.46 points to 947.44
All but one of the 14 Toronto subgroups were lower, as industrials sank 2.2%, utilities swooned 2% and global base metals stepped back 1.9%.
Only gold held out against the negative tide, gaining 1.6%.
ON WALLSTREET
Persistent worries about the slowing economy and when the U.S. Federal Reserve will start tapering its bond buying program had investors on edge again Wednesday.
U.S. stocks fell sharply, extending the previous day's slide, after major global markets also ended in the red.
The Dow Jones Industrials stumbled 216.95 points, or 1.4%, to 14,960.60, ending below 15,000 for the first time since May 6
The S&P 500 index shed 22.77 points to 1,608.61. The tech-rich NASDAQ Composite fell 43.78 points to 3,401.48.
The day's losses were the worst in almost two months for the Dow and NASDAQ
Apple shares slipped after the International Trade Commission ruled that several older Apple products violate a Samsung patent and can't be sold within the United States.
Shares of Toyota dropped after the automaker recalled nearly a quarter million hybrids to fix brakes.
In economic news, the biggest question mark facing investors is how much longer the Fed will continue to boost the economy.
Comments from various Fed officials over the past few weeks have whipsawed markets as investors try to gauge the central bank's next move.
In its Beige Book report, an analysis of regional economic activity, the Fed described the economic recovery as "modest," "moderate" and "measured."
Investors have also been keeping close tabs on economic data for any additional clues.
Elsewhere, payroll-processor ADP said the private sector added 135,000 jobs in May, less than the 157,000 economists were expecting.
The weak reading gave investors hope that the Fed, which currently buys $85 billion U.S. a month of mortgage-backed securities and Treasuries, won't pare back its bond buying program anytime soon.
The ADP report is typically considered a prelude to the U.S. government's closely watched monthly jobs report. That report is due before the bell Friday.
Other economic news was mixed Wednesday. The ISM services sector expanded more than expected, with the index rising to 53.7 in May from 53.1 the previous month. But factory orders rose just 1%, less than the 1.6% forecast.
Prices for the 10-year U.S. Treasury pointed upward, lowering yields to 2.10% from Tuesday’s 2.13%. Treasury prices and yields move in opposite directions.
Oil prices took on 38 cents to $93.69 U.S. a barrel.
Gold prices jumped $5.10 to $1,402.30 U.S. an ounce
