The Toronto stock market was off in afternoon trading Thursday as a higher U.S. dollar put downward pressure on commodity prices.
The S&P/TSX Composite index plummeted 163.98 points, or 1.4%, to end the day at 11,473.06.
The higher U.S. dollar is a result of concerns over the economies of some European countries, causing flight to the relative safe haven of the greenback, according to some experts.
There are also concerns about debt levels in other European countries -- including Ireland, Portugal and Spain -- and news last month that Dubai World, a government-owned investment company, was looking to postpone debt payments of around $59 billion sent shock waves through the financial world
Commodities were also lower. TSX gold stocks took a drubbing, as shares in Goldcorp Inc. lost $1.86 or 4.4% to $40.14 while Barrick Gold Corp. fell $1.09 or 2.6% to $41.20.
The TSX energy sector was down, as Suncor Energy Inc. shares lost $1.28 or 3.4% to $36.62 after the company said it expects production at an oilsands upgrader in northern Alberta to be reduced for a few weeks as the company repairs damage caused by a fire.
The base metals sector also lost ground as metals prices slipped in response to the higher U.S. dollar. HudBay Minerals Inc. lost 39 cents or 2.7% to $14.11.
In other corporate news, shares in BCE Inc. added 95 cents or 3.6% to $27.33 after the telecommunications company said it will raise its annual dividend by 7% for 2010.
Also sending stock markets lower was the knowledge that this is the last full trading week of 2009 and investors may take the opportunity to bolster their portfolios by locking in gains made over the last nine months.
The Canadian dollar fell 0.77 cents to 93.44 cents U.S.
ON BAYSTREET
All but two of the 14 TSX subgroups lost ground Thursday. Gold tumbled 4.2%, while materials slid 3.7% and global base metals were bruised 2%.
The two gainers were telecoms, up 1.2% and utilities, charging ahead 0.7%.
The TSX Venture Exchange let go of 18.64 points to 1,421.15, while the Nasdaq Canada index subtracted 14.48 points to 689.20
ON WALLSTREET
In New York, stocks closed sharply lower Thursday after Greece received another credit downgrade and the dollar rose on the U.S. central bank's cautious comments.
The Dow Jones Industrials staggered 132.86 points, or 1.3%, to close at 10,308.26, while the S&P 500 moved lower by 13.10 points to 1,096.08, while the Nasdaq skidded 26.86 to 2,180.05.
The stock slump came as the dollar rebounded to levels against the euro not seen since September.
The U.S. currency jumped for two reasons, according to one expert. First, he said, are the "continuing jitters" after the Federal Reserve on Wednesday left interest rates unchanged near 0%, saying weakness would remain for some time. Adding to those fears are reports about Greece being downgraded by Standard and Poor's.
The S&P downgrade comes came after health-care companies complained that the country was behind on payments related to its public health system, and it follows Fitch Rating's downgrade of Greece on Dec. 8.
The slump hit several bank shares, with Citigroup down 7.5%, American Express off 2.1% and JPMorgan Chase down 2.2%.
According to reports, the Treasury canceled plans to start selling off part of its 34% stake in Citi after its offering of 5.4 billion shares of common stock drew weak demand.
The offering was part of a plan Citi announced late Wednesday, in which the New York-based lender said it intends to raise $20.5 billion U.S. in the stock market in a plan to pay back its bailout funds.
Bank of America appointed senior executive Brian Moynihan as its new chief executive officer.
Moynihan is currently the president of consumer and small business banking. Exiting CEO Ken Lewis surprised the board when he announced plans to retire in September. Shares were down 1.1%.
Before the start of Thursday trading, package-delivery firm FedEx reported earnings of $1.10 U.S. per diluted share for the second quarter, ended Nov. 30, down from the previous year’s $1.58 U.S.
FedEx issued cautious guidance for the third quarter of 50 to 70 cents U.S. per diluted share. That fell short of a Thomson Reuters forecast of 84 cents U.S. per share. The stock price was down 5.2% in late trading.
After the close Thursday, Oracle is expected to report a profit of 36 cents U.S. per share versus 34 cents a year ago.
Economically, the Labor Department reported its weekly tally of jobless claims, which was higher than expected.
Jobless claims rose by 7,000 to 480,000 in the week ended Dec. 12. Analysts had estimated that the number of American filing first-time claims will fall to 465,000, according to Briefing.com consensus.
The November index of leading economic indicators, from the Conference Board, rose 0.9% -- beating expectations of a 0.7% jump.
The Philadelphia Fed index, a regional read on manufacturing, far surpassed expectations. The reading jumped to 20.4 in December, the highest since April 2005, from 16.7 in November.
Analysts predicted a decline to 16.0.
Treasury prices shot up, driving yields lower on the benchmark 10-year note to 3.48% from Wednesday’s 3.60%. Prices and yields move in opposite directions.
The price of a barrel of oil eked out a gain of a penny to $72.67 U.S.
Gold prices dove $29 to $1,107 an ounce U.S.
