The Toronto stock market tumbled about 2% Wednesday as pessimism about the global economy increased amid a bleak assessment of the economy by the U.S. Federal Reserve and further signs of a slowing Chinese growth.
The S&P TSX Composite Index had jettisoned 265.08 points, or 2.2%, by the closing bell to 11,582.21
The base metals sector fell hard, as the September copper contract on the New York Mercantile Exchange six cents lower to $3.26 U.S. a pound. Teck Resources lost $1.48 to $34.58 and Western Coal Corp. dropped 16 cents to $3.93.
Among energy issues, Suncor Energy gave back $1.39 or 4% to $33.34 while Canadian Natural Resources was down $1.43 to $34.70.
The financial sector lost ground with Royal Bank down $1.28 to $52.07.
Manulife Financial continued to lose ground, down 65 cents or 4.6% to $13.36. The stock has been pummeled after surprising investors last week with a $2.4-billion quarterly loss, followed Tuesday by a downgrade by DBRS.
Gold stocks were also in the red as Barrick Gold Corp. faded 60 cents to $44.33
Investors also took in a variety of earnings reports from the Canadian corporate sector.
Hardware and renovation supply retailer Rona Inc. reported second-quarter profits of $67.8 million, an increase from $60.8 million a year earlier, as sales rose 2.1% to $1.4 billion. Rona shares fell 79 cents or 5.5% to $13.46 as the company disappointed on its outlook.
Supermarket chain Metro Inc. said quarterly net earnings increased 6.6% to $120 million, or $1.12 per share. That’s up from $112 million or $1.01 a year earlier, and in line with analyst expectations. Sales rose 1.4% to $3.56 billion but its shares moved down 45 cents to $43.36.
On Tuesday, silicon metals producer Timminco Ltd. said it narrowed its second-quarter loss to $9.7 million from $24 million a year ago as sales roared back to life following a dismal 2009.
Sales jumped 54% to $34.3 million and its shares surged seven cents or 12.3% to 64 cents.
In economic news, Statistics Canada said the nation's trade deficit with the rest of the world widened to $1.1 billion in June from $695 million in May. Economists were looking for the trade deficit to narrow to $300 million from the deficit of $503 initially reported in May.
The Canadian dollar skidded 1.36 cents to 95.59 cents U.S.
ON BAYSTREET
All 14 TSX subgroups finished the day downward, with metals and mining down 4.3%, global base metals fading 4% and energy suffering 2.8%.
The TSX Venture Exchange fell 22.72 points to 1,441.43, while the Nasdaq Canada index sank 6.94 points to 641.32
ON WALLSTREET
In New York, equities slid to close sharply lower Wednesday after a report showing the U.S. trade gap widening and downbeat foreign data cast doubt on overseas demand for American goods.
The Dow Jones industrial average had collapsed 265.42 points, or 2.5%, to 10,378.83
The S&P 500 index moved lower 31.59 points to 1,089.47, while the tech-rich Nasdaq composite index dropped 68.54 points to 2,208.63
The global bad news unnerved investors, with the CBOE volatility index -- known as the VIX -- jumping more than 14% to 25.61.
A federal judge ordered Wells Fargo to pay more than $200 million U.S. in restitution to California customers for manipulating and multiplying overdraft fees. The 90-page ruling said "a bookkeeping device" allowed the bank to multiply the number of fees it could collect from a single mistake.
AIG said it will sell most of its consumer finance unit to investment manager Fortress. Further terms weren't disclosed, but it should allow AIG to raise cash as it seeks to pay down its obligations to taxpayers stemming from its 2008 bailout. AIG shares dropped 5%.
Shares of Macy's rallied more than 4% in afternoon Wednesday after the department store chain posted a quarterly profit that beat estimates and boosted its earnings forecast for the year.
Toyota said an investigation has so far found no problems with its cars beyond those the company has already recalled. Researchers for the National Highway Traffic Safety Administration looked into 58 crashes of Toyota cars and have not found any further safety defects. But shares were down 2.4%.
Cisco is slated to report fiscal fourth-quarter earnings after the closing bell Wednesday.
Analysts polled by Thomson Reuters were expecting profit of 42 cents U.S. a share on revenue of $10.88 billion U.S.
On the economic front, the U.S. trade balance rose to $49.9 billion U.S. in June, the government said. Economists surveyed by Briefing.com expected the balance to have narrowed to $42.2 billion U.S., from $42.3 billion U.S. in May.
Elsewhere, the National Association of Realtors released a report showing the median price of a single-family home crept up 1.5% to $176,900 U.S. in the second quarter, versus the previous year.
According to the Office of Management and Budget, the nation had a $165.04-billion U.S. budget deficit in July. Economists surveyed by Briefing.com expected the Treasury budget to have a $180.7-billion U.S. deficit.
Meanwhile, the Bank of England lowered its forecast for U.K. economic growth, and it said inflation is likely to be below the 2% target in 2012.
A raft of data from China reflected a mostly downbeat July -- inflation rates missed expectations, industrial production eased to the lowest level this year and retail sales slowed.
Treasury prices flexed muscle, lowering yields for the benchmark 10-year note to 2.68% from Tuesday’s 2.78%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was down $2.70 to $77.55 U.S.
Gold prices regained three dollars by the close to $1,201 U.S. an ounce.
