Nervousness about the European debt crisis continued to build Thursday, sending the Toronto stock market and the Canadian dollar tumbling.
The S&P/TSX composite index plummeted 259.82 points, or 2.2%, to 11,405.95.
The euro, which has become a key indicator of confidence in the continent’s ability to contain growing debt problems in countries like Greece, Portugal and Spain, had one of its rare positive sessions, rising 1.08 cents from late Wednesday to $1.2479 U.S. But the currency had touched a four-year low of $1.2146 U.S. earlier during Wednesday’s session.
Among oil issues, Suncor Energy was down 77 cents to $30.38 and Canadian Natural Resources declined 74 cents to $34.06.
Crude has plunged from $87 U.S. a barrel earlier this month as a debt crisis in Europe has hammered the euro and threatens to undermine economic growth.
In the gold space, Barrick Gold Corp. faded 62 cents to $43.84.
The base metals sector fell, even as July copper shed early losses to rise two cents at $2.97 U.S. a pound after losing ground for the past three days. On the TSX, Teck Resources lost 79 cents to $31.89.
The company said Thursday it has decided to go ahead with development of the Aqqaluk Deposit at its Red Dog zinc mine in Alaska after discussions with U.S. Environmental Protection Agency over water permits. The project is the world’s biggest zinc concentrate mine.
Labrador Iron Mines Holdings shed 51 cents to $4.90.
Railroad stocks led the industrials sector lower as Canadian National Railways gave back $1.66 to $58.44.
The financials sector was also a major decliner with Royal Bank down $2.03 to $58.50 and Scotiabank lost $1.41 to $48.86.
The negative tone on markets has sent the TSX lower for six consecutive sessions, carving over 700 points or more than 6% from the main index, leaving it about 340 points below where it started the 2010 trading year.
A $1-trillion U.S. aid package from the European Union and the International Monetary Fund to help countries deal with huge debt levels has failed to reassure investors. They are concerned that the strict financial measures tied to the bailout could curtail an economic rebound.
Nexen Inc. announced a deal Wednesday to sell nearly $1 billion in heavy oil assets in Western Canada as it continues to hone the focus of its global oil and gas business. Its shares were off 12 cents to $22.19.
The TSX has determined that toy maker Mega Brands Inc. meets the requirements to continue its listing on the stock exchange. The TSX announced in January that it would give the struggling company 120 days to comply with its listing requirements.
Mega Brands completed a capital restructuring that reduced its debt by $300 million U.S. mainly by issuing new equity. Its shares shed two cents to 48 cents.
In economic news, Statistics Canada said its composite leading index rose 0.9% in April, continuing a trend of increases averaging around 1% per month. The results were in line with expectations, following the 1.2% increase in March.
Canada's leading index of economic indicators rose for an 11th consecutive month in April as the nation's housing market continued to snap back and stocks pushed higher.
In another report, the agency said the number of people receiving regular Employment Insurance were down 24,200 to 668,100 in March from the previous month, recording sixth straight month of decline.
The Canadian dollar continued its fall from parity, slipping another 2.24 cents to 93.50 cents U.S.
ON BAYSTREET
All 14 TSX subgroups were lower. Global base metals swooned 4.1%, while the metals and mining group slid 4%, and real-estate stocks pointed 3.2% lower.
The TSX Venture Exchange gave back 62.28 points to 1,421.81, while the Nasdaq Canada index moved 35 points lower to 683.63
ON WALLSTREET
In New York, stocks got pummeled Thursday, with the Dow, Nasdaq and S&P 500 losing enough to fall into "correction territory" -- marked by a drop of more than 10% off the rally highs.
The Dow Jones industrial average plummeted 376.76 points, or 3.6%, to 10,068.01
The S&P 500 index plunged 43.46 to 1,071.59. The Nasdaq composite index fell 94.36 points to 2,204.01
The market had cut losses in the afternoon as the euro gained ground against the dollar, but stocks reversed course and ended just above their lows after the Wall Street reform bill cleared a key hurdle in the Senate that all but assures its passage.
The CBOE Volatility index, the VIX, Wall Street's fear gauge, spiked 25% to a 14-month high of 44.25. The VIX had touched 45.21 earlier.
Economically, a report on weekly jobless claims showed the number of people filing for first-time unemployment benefits rose unexpectedly by 25,000 to 471,000 last week. Economists expected a drop to 440,000 claims.
After the start of trading, the Conference Board released its index of leading economic indicators. LEI fell 0.1% in April after rising 1.3% in March. The index was expected to have risen 0.2%.
The May Philadelphia Fed index, a regional manufacturing survey, rose to 21.4 from 20.2 in April, beating expectations for a rise to 20.7.
An expansive bill to overhaul U.S. financial rules failed a key test vote in the Senate late Wednesday, but the body intends to try the vote again on Thursday.
The bill aims to stop bailouts, de-complicate financial products and strengthen consumer protection. The vote was 57 to 42. Under Senate rules, Democrats needed 60 votes to move ahead to a final vote.
New rules continue to be proposed in the wake of the May 6 stock market selloff, in which erroneous trading in hundreds of issues created a panic that dragged down the broad market.
Since then, most of the trades have been cancelled, but regulators remain unclear as to what exactly caused the selloff.
Out-of-control computer trading may have caused the slump, Securities and Exchange Commission chairwoman Mary Schapiro told a Senate panel Thursday.
On Tuesday, the SEC proposed new rules that would impose circuit breakers, or a temporary pause, on individual stocks that experience extreme swings. There are already circuit breakers in place for the broad markets, but this would impact individual stocks.
After trading ends Thursday, Dell will report quarterly earnings results.
Treasury prices rose sharply, lowering the yield on the 10-year note to 3.26% from Wednesday’s 3.36%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil sank $2.71 to $69.77 U.S.
Gold prices slid $12 to $1,182 U.S. an ounce
