Stocks on Bay Street traded lower this afternoon -- led by a decline in mining and financial stocks -- in a broad selloff as investors focused in on gloomy news from the banking sector.
The S&P/TSX composite index was down 388.95 points to 8,101.61.
Bank of Nova Scotia said late on Tuesday it would take a $890 million pretax charge in the fourth quarter because of sliding securities valuations in volatile markets.
Scotiabank sank 5.2 percent to $35.24, while Canadian Imperial Bank of Commerce fell 5.1 percent to $48.29.
Toronto-Dominion Bank said on Thursday that $350 million in after-tax credit trading losses will eat into fourth-quarter earnings, citing a ''dramatic absence of liquidity in global credit markets''. TD, Canada's second-largest bank, forecast net earnings per share of $1.22 for the quarter ended October 31, and adjusted earnings of $642 million, or 79 cents a share.
Analysts were expecting $1.19 on a net basis, and $1.39 per share before items.
Elsewhere in the sector, Royal Bank of Canada dropped 5.4 percent to $41.19 and Manulife Financial fell 6.2 percent at $20.97.
In other news -- Kinross Gold Corp. said it is paying about US$250 million to buy Minera Santa Rosa SCM, owner of the Lobo-Marte gold project in northern Chile, from Teck Cominco Ltd. and Anglo American PLC.
As for the day's economic data -- the Department of Labor reported that jobless claims for the week ended Nov. 15 had increased by 27,000 to reach 542,000, their highest levels since 1992. Economists had anticipated claims numbers to come in at 503,000. The Conference Board's leading indicators index and the Philadelphia Fed's manufacturing survey are due out a bit later.
In Canada -- wholesale sales increased 1.5 percent to $46.3 billion in September, boosted largely by a partial recovery in the automotive sector. Statistics Canada reports sales volume rose 1 percent after the impact of price changes was removed.
The Canadian dollar, meanwhile, was trading at 77.77 cents US, down 1.98 cent after dropping 1.48 cents Wednesday.
BAYSTREET
All of the TSX sub-groups were trading lower -- mining stocks were down 7.47 percent followed by a 6.87 percent drop in energy issues and a 6.82 percent slump in financial stocks.
COMEX gold for December delivery rose $6 to $742 US an ounce.
Meanwhile, the TSX Venture Exchange moved down 24.89 points to 705.20 and NASDAQ Canada stocks fell 7.23 points to 435.67.
ON WALLSTREET
U.S. stocks continued to slump to fresh five-year lows Thursday, with concerns about the economy and the ailing financial and auto sectors leading the market to fresh five-year lows.
The Dow Jones Industrial Average, down more than 200 points earlier, was recently off only 45 points at 7952. The S&P 500 was losing 6 points at 801. The Nasdaq was lower by 1 point at 1385.
Among Dow components, General Motors Corp. slumped another 10 percent. Amid concerns about a possible bankruptcy for the auto giant, GM's financing unit GMAC applied to become a bank holding company to access emergency cash from the government.
Turning to financial companies, Citigroup shares looked ready to recover from a 20 percent drubbing during the previous outing, as Saudi billionaire Prince Alwaleed, the largest individual shareholder in Citi, announced he would raise his stake in the staggering bank to 5 percent from 4 percent.
Among technology companies, Yahoo! is still in talks to purchase Time Warner's AOL business, according to another report by Bloomberg.
Longer-dated U.S. Treasury securities were soaring in price as investors sought safety from the troubled stock market. The 10-year was up 1-8/32, yielding 3.17 percent, and the 30-year was adding 3-1/32 to yield 3.75 percent. The American dollar was strengthening vs. the euro and pound, but falling against the yen.
U.S. light crude oil for December delivery fell $2.62 to $51 US a barrel on the New York Mercantile Exchange, after briefly falling below $50 a barrel in electronic trading. Oil is trading at the lowest levels since Jan. 2003.
