Toronto stocks fell 2.7% on Thursday, following the lead of global stocks. Weakness in the commodity sectors led the way down.
A few minutes before the closing bell, the S&P TSX Composite index had plummeted 307.41 points to 11,087.55.
Mining stocks were down, as Inmet dropped 4% to $57.57, First Quantum was down 3.6% to $67.47 and HudBay lost 4% to $12.83.
Materials stocks and gold stocks have lost ground. Iamgold lost 6.8% to $14.10, while Eldorado was down 4.9% at $11.56
Energy stocks lost steam, as Suncor dipped 4.2% to $35.82, Canadian Oil Sands dropped 4.1% to $29.50 and Canadian Natural Resources dipped 3.4% to $69.84.
Medicure surged 12.5% to 4.5 cents after the company announced that Chief Financial Officer Dwayne Henley had resigned.
MacDonald, Dettwiler and Associates announced that it has signed a multi-million-dollar contract with Thales Alenia Space France to provide an advanced technology solution for the European Space Agency's or ESA Sentinel-3 mission. The stock retreated 1.4% to $31.00.
Richelieu Hardware dropped 0.6% to $19.37 after the company reported that its third-quarter net earnings were $8.9 million or $0.40 per share, compared to net earnings of $9.6 million or $0.42 per share in the prior year quarter. Sales for the quarter were $109.4 million, down from $111.8 million in the year ago quarter.
Shaw Communications announced that it has closed its offering of $1.25 billion principal amount of 5.65% senior unsecured notes due 2019. Shares are down 1.3% to $19.13.
Bankrupt Canadian network solutions company Nortel Networks announced plans to sell vide "open auction" all of its global GSM/GSM-R business. The sale is expected to include the transfer of certain GSM patents.
On the economic front, the International Monetary Fund predicted the Canadian economy will grow by 2.1% in 2010, compared to the previous forecast of a 1.6% increase. The IMF also expects the economy to decline 2.5%, compared to a previously-predicted 2.3% dip.
The Canadian dollar swooned 1.13 cents to 92.31 cents U.S.
ON BAYSTREET
All 14 TSX subgroups were down on the day. Metals and mining stocks stumbled 3.9%, while real-estate stocks suffered 3.8% and materials stocks were off 3.7%.
The TSX Venture Exchange fell off 27.88 points to 1,249.33, while the Nasdaq Canada index was down 10.31 to 697.82.
ON WALLSTREET
In New York, stocks tumbled Thursday after a bigger-than-expected rise in weekly jobless claims and a weaker-than-expected reading on manufacturing sparked worries about the pace of the economic recovery.
The Dow Jones Industrials collapsed 203 points, or 2.1%, to close at 9,509.28. The S&P 500 index slid 27.23 points, to 1,029.85. The Nasdaq composite index stumbled 64.94 points to 2,057.48.
Many of the stocks and sectors that fueled massive third-quarter gains also drove the selloff on Thursday, the first day of the fourth quarter.
Dow components JPMorgan Chase and American Express were among the financial shares sliding on the day, dragging down the KBW Bank index by 4.6%. Yet financials were the biggest gainers in the third quarter, with the sector as a whole spiking 25% and the KBW index rising 29.5%.
Industrials and materials gained more than 20% each in the July-through-September period, and both those sectors tumbled, too.
But declines were broad-based, with 28 of 30 Dow stocks falling, including Boeing Chevron, Exxon Mobil, IBM, Microsoft, Hewlett-Packard and Caterpillar.
Stocks are coming off the best quarter in more than a decade, leaving markets vulnerable to a little selling, particularly amid the recent spate of weaker-than-expected economic reports.
Worse-than-expected reports on the labor market, consumer confidence and Midwest manufacturing have caused stocks to slide in five of the last six sessions. But the modest selloff barely dented an otherwise robust third quarter.
The Dow and S&P 500 both gained 15% in the July-through-September period, seeing the biggest quarterly gains since the fourth quarter of 1998. The Nasdaq rose 15.7% and saw its best quarterly gains since the second quarter of 2003.
But stocks have been vulnerable recently after the massive rally that has essentially propelled the major indexes for seven months straight, with only a brief retreat in late June and early July.
Since bottoming at a 12-year low March 9, the S&P 500 has gained 56%, and the Dow has gained around 48% as of Wednesday's close. After hitting a six-year low, the Nasdaq has gained nearly 64%.
But calls for a big September selloff never materialized, with any selling pretty minimal.
Analysts say that there are still enough supportive factors in play to keep stocks flat to higher through year end. Supports include improving corporate profits, a slowly stabilizing economy and a still-considerable amount of fiscal and monetary stimulus.
Comcast has disputed reports that it is in talks to buy part of General Electric's NBC Universal. Comcast shares slumped 7%, while GE shares fell 2%.
Cisco said it is buying Norway's Tandberg ASA, a video conferencing hardware maker, for $3 billion U.S. in cash. Cisco shares dropped 1.5%.
Late Wednesday, Bank of America said that CEO and president Ken Lewis is retiring Dec. 31 after 40 years with the company. BofA did not name a successor. Some analysts say Lewis's departure only heightens concerns surrounding the firm. BofA shares were barely lower.
Also late Wednesday, General Motors said it is shutting down its Saturn division after a deal to sell it to Penske Automotive Group fell apart.
Economically speaking, the Institute for Supply Management's September ISM index fell to 52.6 from 52.9 in August. Economists surveyed by Briefing.com thought it would rise to 54.
Also on the downside, weekly jobless claims jumped more than expected last week. The number of Americans filing new claims for unemployment increased to 551,000 from 534,000 the previous week. Economists thought it would rise to 535,000.
On the upside, the index of pending home sales rose 6.4% in August versus forecasts for a rise of 1%. The index, from the National Association of Realtors, increased 3.2% in the previous month.
Personal income and spending both rose more than had been anticipated in August, according to a Commerce Department report released Thursday. Personal income rose 0.2% after rising 0.2% in the previous month. Economists thought it would rise 0.1%. Spending rose 1.3% after rising 0.3% in the previous month. Economists thought it would rise 1.1%
Another government report showed construction spending edged up 0.8% in August after falling 1.1% in July. Economists thought it would fall 0.1%.
Federal Reserve chairman Ben Bernanke is testifying at a House Financial Services hearing on the central bank's perspective on proposed reforms to the financial regulatory system.
Bernanke backed most of President Obama's plan for overhauling the regulatory system, with the exception of a consumer agency.
Treasury prices leaped, sharply lowering the yield on the benchmark 10-year note to 3.19% from Wednesday’s 3.30%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained 21 cents to $70.40 U.S.
Gold prices slid $9 to $1,001 U.S. an ounce.
