The Toronto stock market tumbled Tuesday as demand concerns pushed commodity prices sharply lower while investors were disappointed with the start of the U.S. first-quarter earnings season.
The S&P/TSX Composite Index jettisoned another 195.46 points, or 1.4%, to end the day at 13,801.40
The Canadian dollar slid 0.65 of a cent to 103.92 cents U.S., after the Bank of Canada said it would leave its key interest rate unchanged at 1%. Analysts said it looked likely the bank wouldn’t move on rates until at least mid-2011.
The central bank warned that the persistent strength of the Canadian dollar could create problems for the Canadian economy. The loonie started the year off just above parity with the greenback.
Still, the bank upped its estimate for economic growth. It said the economy should grow 2.9% this year, higher than the bank’s previous forecast of 2.4%
TSX losses were led by big declines in the resource sector amid worries that economic conditions aren’t looking as rosy as just a few weeks ago.
The energy sector fell sharply, with Suncor Energy down $1.46 at $42.05 while Canadian Natural Resources dropped $1.22 to $44.34.
The base metals sector was also a big loser, while the May copper contract on the Nymex dipped nine cents to $4.37 U.S. a pound. Teck Resources lost $1.96 to $51.87 while Quadra FNX Mining moved down 53 cents to $13.91.
Mercator Minerals Ltd. is set to acquire Creston Moly Corp. in friendly deal that values Creston at about $195 million. The companies say the deal will create a "significant" copper and molybdenum miner. Mercator shares fell 33 cents to $3.36 while Creston shares jumped 11 cents to 57 cents.
Gold stocks were lower as Barrick Gold Corp. stepped back 31 cents to $50.35.
The decline spread across all sectors with the financial sector down on the day. Royal Bank eased 40 cents to $59.80 and Scotiabank lost 50 cents to $57.50
The negative showing on the TSX followed a 212-point slide Monday
Clothing manufacturer Gildan Activewear Inc. was one of the few big gainers on the TSX Tuesday.
Its stock jumped $2.14, or 7%, to $32.80 after it said it was buying U.S. sock maker Gold Toe Moretz Holdings Corp. for $350 million U.S. Gildan said Monday that the deal would more than double the company’s current revenues from the sale of socks and also expand and diversify its customer base and distribution in the United States.
Husky Energy Inc. said its Lloydminster heavy oil upgrader had returned to near regular operation after a fire on Feb. 2 led to production cuts of at least 50 per cent. What the company described as a "minor fire" damaged a hydrocracker fractionation unit, which supplies product to the coker. Husky shares lost $1.15 to $27.80.
On the economic front, Statistics Canada reported this morning that its New Housing Price Index (NHPI) rose 0.4% in February, following a 0.2% advance in January.
The agency also said Canada's trade surplus went from $382 million in January to $33 million in February, with exports falling 4.9% to $35.9 billion while imports decreased 4.0% to $35.8 billion.
ON BAYSTREET
The TSX Venture Exchange surrendered 42.73 points to 2,303.77, while the Nasdaq Canada index doffed 11.68 points to 745.86
In Toronto, all but two of the 14 subgroups remained in negative country. Energy plummeted 3% while metals and mining shed 2.9%, and global base metals deducted 2.6%.
Telecoms proved the lone gainer at 0.2%, while information technology issues were flat.
ON WALLSTREET
In New York, stocks remained under pressure Tuesday afternoon, as a 3% drop in oil prices sparked a selloff in energy stocks and Alcoa continued to weigh down the Dow.
Investors were also on edge after Japanese officials raised the threat level at the Fukushima nuclear plant to the same as Chernobyl.
The Dow Jones industrial average dropped 117.53 points, to 12,263.60, dragged down by a more than 6% drop in Alcoa's stock. The aluminum giant reported disappointing sales late Monday.
Energy companies also weighed on markets, as oil prices retreated more than 3% following a Goldman Sachs forecast for a $20-U.S.-a-barrel drop in crude prices this spring. Chevron and Exxon Mobil were big laggards on the Dow.
Pioneer Natural Resources, Nabors Industries, Denbury Resources, Range Resources and National Oilwell Varco pressured the S&P 500, which slipped 10.30 points, to 1,314.16.
The tech-rich Nasdaq Composite Index docked 26.72 points, to 2,744.79, as chipmakers such as Broadcom and Micron Technology lost ground amid global growth concerns.
Cisco Systems announced that it was taking a restructuring charge of $300 million U.S., as it prepared to reduce its staff by 550 workers. Cisco shares were down less than 0.1%.
Speaking of things economic, the Commerce Department released data on the U.S. trade balance for February, showing that the deficit narrowed to $45.8 billion U.S., the gap was slightly more than expected.
Economists surveyed by Briefing.com expected the report to show the trade deficit narrowed slightly to $45.7 billion U.S., down from $46.3 billion U.S. in January.
Early Tuesday, lawmakers finally revealed the specific spending cuts that make up the budget plan signed last week.
The 2011 budget cuts will slash $40 billion U.S. -- cutting back on a wide range of programs and services including high-speed rail, emergency first responders and the National Endowment for the Arts.
The Treasury Department said the federal deficit increased to $188.2 billion U.S. in March. The monthly shortfall was just shy of the $189 billion U.S. forecast by economists.
The price on the benchmark 10-year U.S. Treasury improved, pushing yields down to 3.50% from Monday’s 3.57%. Treasury prices and yields move in opposite directions.
Oil for February delivery gave back $4.30 to $105.62 U.S. a barrel.
Gold futures for June delivery fell $14.50 to settle at $1,453.60 U.S. an ounce.
