The Toronto Stock Exchange began Tuesday with a shudder, as fear rippled through the world that a potential nuclear disaster in Japan could reopen the wounds of a freshly healed global economy.
But by late afternoon, the main index of the TSX had regained much of its composure, recovering from a 381-point plunge early in the session to sit just 72.23 points in the red at 13,546.96
Investors around the world were trying Tuesday to come to terms with the economic impact of the earthquake and tsunami that hit Japan last Friday, killing thousands, devastating the country’s northeast coast and causing explosions at several nuclear power plants.
The events have triggered a selloff of equities in Canada and around the globe, one that may have overestimated the scale of the economic disaster, said one analyst.
Canadian uranium miners sustained a second day of sharp losses on concerns that the nuclear industry has suffered a huge setback as a result of developments in Japan.
Paladin Energy fell 19 cents, or 5.2%, to $3.48 on top of a 21% tumble Monday, while Cameco Corp. reversed direction and recovered about 1.2% to $32.07, after sliding 13% a day before, though some analysts point out that Cameco has a unique problem, selling about 20% of its fuel to Japan
Mining stocks also shed gains as demand concerns pushed copper down five cents to $4.14 U.S., far below recent highs of more than $4.60 U.S. a pound. The gold sector also backed off as bullion prices retreated because of the rising American dollar and concerns that demand from Asia would suffer.
Financial stocks also weighed on the Toronto market with insurers taking some of the biggest hits: insurer Manulife Financial was down 4.3% to $16.02, which has said it could face claim payouts of up $150 million related to its business in Japan
The TSX energy sector was down with Imperial Oil down 28 cents to $49.00 while Canadian Natural Resources gained 95 cents, or more than 2%, to $46.00
The base metals sector fell, though Equinox Minerals was up three cents to $4.87. Lundin Mining, however, lost 14 cents to $6.97.
The gold sector fell substantially with Barrick Gold Corp. down $1.18 to $48.45 and Goldcorp Inc. lost 58 cents to $45.75.
On the economic front, Statistics Canada reported this morning that January vehicle sales jumped 3.2% from the previous month to 131,393, powered again by new truck sales.
ON BAYSTREET
The TSX Venture Exchange backed off 62.86 points to 2,130.21, while the Nasdaq Canada index erased 13.70 points to 763.50
In Toronto, nine of the 14 subgroups remained negative by the final bell. Gold stocks were shaken 1.5%, consumer discretionary issues were off 1%, and industrials slid 0.9%.
Metals and mining stocks led the five gainers, garnering 1.5%, while global base metals surged 0.8% and information technology picked up 0.6%.
ON WALLSTREET
In New York, equities started to regain some lost ground in the last hour of trading Tuesday, but Japan's devastating earthquake and nuclear crisis still have investors on edge.
The Dow Jones industrial average shrank 137.74 points, or 1.2%, to 11,855.40. All but one of the 30 Dow components were in the red.
The S & P 500 was down 14.52 points to 1,281.87. The tech-rich Nasdaq Composite Index went south 33.64 points to 2,667.33.
Markets are reeling from the staggering human and economic toll from Japan's 9.0-measure earthquake and subsequent tsunami last Friday, which killed at least 3,373 people.
The earthquake also damaged Japan's Fukushima Daiichi nuclear power plant, and subsequent explosions and fires there have only escalated fears about a nuclear crisis in Japan.
Japan's Nikkei index ended down nearly 11%, as the crisis at the Fukushima Daiichi nuclear power plant deepened. The index was down as much as 14% during the session before recovering at the close.
The Japanese nuclear plant that exploded Saturday is equipped with reactors designed by Dow component General Electric. GE shares fell 2.5% Tuesday.
Insurance companies in the S&P 500 also sank, led by Aflac which tumbled 7.2%. Aflac generated about 75% of its revenue in Japan last year.
Hartford Financial Services Group fell 5.7%, Prudential dropped 3% and MetLife fell 4.2%.
Netflix was one of the few stocks to buck the downward trend, rising 7.7% after Goldman Sachs upgraded the stock earlier in the day.
On things economic, a somewhat positive statement from the Federal Reserve, which would typically garner attention, failed to sway investors significantly in the afternoon. The Fed made no mention of the events in Japan.
The price on the benchmark 10-year U.S. Treasury jumped sharply, bringing yields down to 3.32% from Monday’s 3.35%. Treasury prices and yields move in opposite directions.
Oil for February delivery fell $3.63 to $97.56 U.S. a barrel.
Gold prices demurred $25.75 to $1,395.75 U.S. an ounce.
