The Toronto stock market tumbled nearly 3% as a sharp revision downward in growth prospects for China intensified worries that the global economic rebound is faltering.
The S&P TSX Composite Index collapsed 343.17 points to 11,263.83.
Markets fell after the U.S. Conference Board said late Monday that a calculation error led it to incorrectly state its economic leading indicator for China for the month of April. It said the gauge of future economic growth was up only 0.3%, rather than the 1.7% it had initially stated.
Strong growth from China has so far helped the global economy start to dig itself out of a severe recession. Demand for oil and minerals has been particularly beneficial for the resource-stock heavy Toronto market.
Financials were the biggest drag, down three per cent with Royal Bank down $1.84 to $50.77 and Manulife Financial lost 85 cents to $15.40.
The base metals component was the biggest percentage decliner, as the July copper contract on the New York Mercantile Exchange lost 15 cents to $2.92 U.S. a pound.
Teck Resources was a major decliner, down $1.93 to $31.75. The company had reported earlier that an explosion in a coal dryer has shut down its Greenhills coal mine near Elkford, B.C. The company said damage to the dryer building is extensive and it’s not yet known how long the mine's production will be affected.
Elsewhere, Lundin Mining fell 28 cents to $3.03.
Railways fell alongside mining stocks with Canadian National Railways down $1.37 to $61.10.
Canadian Pacific Railway Ltd. shares fell $2.01 to $56.57.
It said that its second-quarter earnings will take a 10- to 13-cent per share hit as a result of a washout on its main line east of Medicine Hat, Alta. CP said Tuesday the line is open again after severe flooding washed out some of its tracks more than a week ago.
The energy sector fell as the August crude contract on the New York Mercantile Exchange fell.
Suncor Energy lost $1.42 to $31.58 while Canadian Natural Resources declined $1.25 to $35.00.
Also depressing crude prices were signs Tropical Storm Alex would likely miss most of the rigs in the Gulf of Mexico, leaving supplies uninterrupted.
The gold sector was slightly lower as Goldcorp Inc. was $1.10 lower to $45.64.
Fears that a global rebound is weakening have spread to American consumers as well. Canadian consumer confidence slipped in June, according to the latest monthly report by a prominent economic forecaster.
The Conference Board of Canada says its index of consumer confidence dropped to 83.6 in June. Its index sits 13 points below where it began the year.
Elsewhere, in economic news, Statistics Canada said Industrial Product Price Index (IPPI) edged up 0.3% in May, largely due to that month's relative weakness in the Canadian dollar against its U.S. counterpart. Economists expected industrial product prices to slip 0.2% in May.
The IPPI had advanced 0.4% in April, continuing its uptrend that started in November 2009. Meanwhile, the Raw Materials Price Index dipped 7.2%, mainly due to lower crude oil prices.
The Canadian dollar tumbled 2.02 cents at 94.61 cents U.S.
ON BAYSTREET
All 14 TSX subgroups stayed negative throughout the day. Metals and mining issues gave back 6.9%, global base metals 4.4%, while energy stocks were 3.5% to the bad.
The TSX Venture Exchange slid 41.57 points to 1,409.74 while the Nasdaq Canada index stumbled 32.75 points to 597.04
ON WALLSTREET
In New York, stocks tumbled Tuesday, with the S&P hitting an eight-month low after a big drop in consumer confidence and signs of a bigger slowdown in the global economy.
Investors plowed into the safety of government debt, sending the 10-year note yield below 3% for the first time in 14 months.
The Dow Jones industrial average ended the day down 268.22 points, or 2.7%, to 9.870.30, after having earlier lost as much as 326 points.
The S&P 500 index fell 33.33 points to 1,041.24, falling to a fresh 2010 low of 1,037.51 and its lowest point since November. The 1,041 level is a key technical indicator market that pros have been watching. Closing below that level could set off a bigger wave of selling over the next few days.
The Nasdaq composite index moved 85.47 points lower to 2,135.18.
Stocks slipped at the open on global concerns but the selling picked up steam after the release of the Consumer Confidence index for June
Concerns about the job market and economy have dragged on stocks on and off for the last two months, with the major gauges falling into a correction after hitting rally highs in late April.
A correction is a plunge of at least 10% off the highs. As of Tuesday morning, the S&P is off nearly 14% from the highs of late April.
Tuesday's woes were sparked by a weak reading on Japanese export demand and household spending, and a fresh round of protests by Greek citizens opposed to government austerity measures.
The euro, something of a proxy for European debt worries, plunged.
Declines were broad-based, with all 30 Dow issues falling, led by Boeing, Caterpillar, Chevron, IBM and United Technologies
A variety of financial stocks slumped, with the KBW Bank sector index off by 3.5%. Components JPMorgan Chase, Bank of America and Wells Fargo all lost 4%, while Citigroup fell 6%.
Electric car maker Tesla Motors debuted on the Nasdaq under the ticker TSLA, rising 12% from its IPO price late Monday.
Tesla priced its shares at $17 U.S. each, above the $14-16 U.S. target range, allowing it to raise over $226 million U.S. in the IPO.
Economically speaking, home prices were up 3.8% in April versus a year ago, according to the S&P/Case-Shiller Home Price Index of 20 major housing markets.
Economists surveyed by Briefing.com expect the index to have risen 3.4% in April after jumping 2.3% in March.
Home prices rose 0.8% in April compared with March. But prices are still off 30% from their peak.
Consumer confidence slumped to 52.9 from 62.7 in May, trouncing expectations for a small dip to 62.0, according to economists surveyed by Briefing.com.
Treasury prices continued to gain, lowering the 10-year note's yield to 2.97% from Monday’s 3.03%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gave back $2.71 to $75.54 U.S.
Gold prices inched up three dollars to $1,24s U.S. an ounce.
