Toronto stocks dropped sharply on Thursday as crude oil hit a monthly low, dragging the energy sector lower. Mining stocks also saw notable weakness.
As the closing bell approached, the S&P TSX Composite index had gotten rid of 228.46 points, or 2% to 11,289.08, its second straight negative finish and fifth in six sessions.
Mining stocks were down giving back some recent gains. Inmet dropped 5.4% to $55.59, First Quantum dropped 3.9% to $66.27 and Iamgold is down 4% to $14.48.
Energy stocks lost ground Canadian Natural Resources lost 3.8% to $72.09, Canadian Oil Sands was down 2.1% to $28.63 and Suncor lost 1.9% to $37.46.
In other corporate news, Kinross dropped 2.1% to $22.95 after the stock was downgraded to "market weight" from "overweight" at Thomas Weisel.
Barrick Gold had its target price reduced to $46 from $48 but kept its "buy" rating. However, the stock was up 1.6% to $39.86.
Canwest Global Communications soared 56% to 19.5 cents after the company announced an agreement to sell its 50.06% stake in Ten Network Holdings Limited to Macquarie Capital Advisers Limited for about A$680 million or $634 million.
Potash Corp. dropped 0.9% to $99.13 after the company said that it has priced an offering of $500 million U.S. aggregate principal amount of 3.75% notes due September 30, 2015 and $500 million U.S. aggregate principal amount of 4.875% notes due March 30, 2020.
Gennum Corp. added 3.7% to $4.49 after the company declared a regular cash dividend of $0.035 cents per share to be paid on October 21 to shareholders of record on October 7.
DHX Media surged 14.3% to 80 cents after the company said it has signed three broadcast deals with major Australian broadcasters through its distribution subsidiary DECODE Enterprises.
Research in Motion was down 1.8% to $90.75 ahead of its second-quarter earnings report, which was due after the bell.
The Canadian dollar subsided 1.09 cents to 91.82 cents U.S.
ON BAYSTREET
All 14 TSX subgroups went south, sinking on the shoulders of metals and mining stocks, off 3.6%, real-estate stocks, 2.9% and energy stocks, 2.3%.
The TSX Venture Exchange darted 21.49 points lower to 1,256.36, while the Nasdaq Canada index lost 27.77 points to 820.67.
ON WALLSTREET
In New York, stocks slumped Thursday, falling for the second straight session, as a surprise drop in existing home sales and tumbling commodity prices gave investors a reason to sell into a rally that pushed the major gauges to one-year highs.
The Dow Jones Industrials tumbled 41.11 points to 9,707.44. The S&P 500 index dropped off 10.09 points, to 1,050.78. The Nasdaq composite index was down 23.81 points to 2,107.61.
Declines were broad based, with two out of every three Dow stocks sliding, including GE, Alcoa, Bank of America, Chevron, Boeing, Caterpillar, Hewlett-Packard and United Technologies.
Stocks gained in the early going after the Labor Department reported that jobless claims fell for the third week in a row. But the market abandoned gains after the housing report. A slide in oil and gold shares on the back of a stronger dollar dragged on commodity stocks.
Stocks slipped Wednesday, falling from almost one-year highs, after the Federal Reserve kept interest rates unchanged and essentially maintained its recent economic outlook. A week ago, Fed chief Ben Bernanke said the recession was very likely over, but the labour market still has a long way to go.
In the short term, "there's not a whole lot of bad news that could derail equities," said Robert Siewert, portfolio manager at Glenmede. "But the rally since March has been the sharpest since the 1930s and it's not surprising to see occasional pullbacks."
However, Siewert said that longer term, there are a lot of headwinds that could challenge stocks, with 2010 likely a tougher year for equities. He cited challenges including the eventual rising of taxes, the labour market weakness, the still-tight credit market and the struggle of a consumer that chooses to save at the expense of personal spending.
Shares of A123 Systems surged as much as 56.6% from their initial pricing, before trimming the gain to just over 50% at the close. The company, one of a small group of electric-car battery makers, raised $380 million U.S. in an initial public offering Wednesday that priced above forecasts. The company trades under the ticker symbol AONE.
A123 was one of five companies that went public Thursday, the biggest day for the IPO market since Nov. 15, 2007, when six debuted.
Among the other debuts, online pharmacy Vitacost.com was little changed Thursday and asset management firm Artio Global Investors added 3.5%.
Two REITs also debuted: Apollo Commercial Real Estate Finance, which fell 7% Thursday, and Colony Financial, which fell 2.5%.
Three more IPOs are due by the end of the week and eight over the next two weeks. The recharged market is seen as another indicator that a broader economic recovery is taking hold.
In other company news, Rite Aid reported its ninth consecutive quarterly loss Thursday morning, although the results were not as weak as analysts had expected. However, the drugstore chain also said it would see a wider fiscal-year loss than it initially thought because of falling sales.
Shares fell 15%
Among other movers, Chelsea Therapeutics tumbled 60% after its experimental drug to treat a neurological disorder showed disappointing results in a late-stage trial.
The major indexes ended Tuesday's session at the highest levels since just after the collapse of Lehman Brothers last September.
Since bottoming at a 12-year low March 9, the S&P 500 has gained 56.8% and the Dow has gained 48.9%, as of Wednesday's close. After hitting a six-year low, the Nasdaq has gained 68%.
The stock advance was driven by signs that the economy is slowly starting to recover -- and by extraordinary amounts of fiscal and monetary stimulus.
Despite predictions of a big September selloff, stocks have seen only modest pullbacks that have been met with renewed buying.
Economically speaking, existing home sales fell to a seasonally-adjusted 5.1-million-unit rate in August from a 5.24-million-unit rate in July, according to a report from the National Association of Realtors. Economists surveyed by Briefing.com forecast that sales would rise to a 5.3-million-unit rate in the month.
Elsewhere, the Labor Department released its weekly figures for initial jobless claims. In the week ended Sept. 19, 530,000 people filed claims, down 21,000 from the prior week's revised figure.
According to a consensus of economist opinion from Briefing.com, 550,000 people were expected to have filed jobless claims.
The G-20 summit in Pittsburgh begins Thursday. The Group of 20 leading developed and emerging countries will discuss the ongoing efforts to stabilize economies after the financial market meltdown.
The Federal Reserve said Thursday it was dialing down a pair of emergency programs in the wake of an improving economy. The central bank is cutting back the amount of money available to banks under the Term Auction Facility, a short-term loan program.
The Fed is also pulling back on a program that lets investment banks trade bad debt for safe Treasury debt.
Treasury prices moved higher, lowering the yield on the benchmark 10-year note to 3.37% from Wednesday’s 3.40%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil nosedived $3.08 to $66.05 U.S.
Gold prices surrendered $16 to $999 U.S. an ounce.
