The Toronto stock market was lower Thursday with investors disinclined to buy amid rising fears that Greece will have to default on its debt and further signs of a slowing American economy.
The S&P/TSX Composite Index plummeted 118.90 points to end the session at 12,853.13.
The Canadian dollar subtracted 0.46 cents to 101.71 cents U.S.
Greek Prime Minister George Papandreou announced Wednesday he would reshuffle his cabinet and ask for a confidence vote in parliament after talks to form a coalition government collapsed.
The governing Socialist party is trying to pass critical austerity measures that creditors have demanded in return for continued funding from a euro110 billion ($155 billion U.S.) international bailout. It’s extremely unlikely that another rescue deal will be offered if the Greek Parliament fails to back those new measures.
Investors are deeply worried that a default in Greece could hurt banks elsewhere and set off a catastrophic financial chain reaction.
The energy sector was down with EnCana Corp. down 51 cents to $30.12 while Canadian Natural Resources shed 47 cents to $38.45.
Metal prices stabilized, with the July copper contract unchanged at $4.12 U.S. a pound. The base metals sector moved down, as Teck Resources lost $1.64 to $43.76 while Lundin Mining declined 21 cents to $6.38.
The gold sector was down as Goldcorp Inc. faded $1.32 to $45.44 and Barrick Gold Corp. declined 74 cents to $42.31.
The utilities and consumer discretionary sectors advanced as investors moved into defensive stocks.
Industrial stocks were lower with CP Rail down 59 cents to $58.82.
Bombardier Transportation has lost a large London rail contract as the British government selected German rival Siemens to supply 1,200 electric commuter trains for the $9.5-billion Thameslink program. Its shares slipped six cents to $6.82.
Elsewhere on the TSX, shares in Research In Motion Ltd. regained 33 cents to $34.79 ahead of the BlackBerry maker releasing earnings after the market close.
Air Canada shares ran ahead 14 cents to $2.15 after the carrier and its striking workers reached a tentative contract deal Thursday. Details were of the pact, reached shortly after the federal government introduced back-to-work legislation seeking to force the customer service agents back to their posts, were to be released later in the day.
On the economic front, Statistics Canada reported this morning that foreign investment in Canadian securities hit a three-month high of $8.2 billion. Meanwhile, Canadian holdings of foreign securities were down by $3.3 billion, as investors shed U.S. government bonds.
ON BAYSTREET
The TSX Venture Exchange lost 34.87 points to 1,889.35 while the Nasdaq Canada index dropped 4.86 points to 573.94
In Toronto, all but one of the 14 subgroups suffered losses today. Metals and mining collapsed 3.4%, materials were off 2.7% and gold slid 2%.
Only consumer discretionaries managed to squeeze out a 0.1% improvement, while real-estate issues flat-lined on the day.
ON WALLSTREET
In New York, stocks sputtered in late Thursday trading as weakness in the tech sector countered stronger-than-expected reports on the housing market and unemployment.
The Dow Jones Industrial Average still picked up 64.25 points on the day to 11,961.50.
The Dow was pushed in a positive direction by shares of American Express and Home Depot, both up more than 2%. However technology shares dragged the broader market lower, with Netflix falling more than 4% and Qualcomm and Nvidia dropping more than 2%.
The S&P 500 gained 2.22 points to 1,267.64. The Nasdaq Composite was down 7.76 points to 2,623.70.
Stocks were briefly in danger of extending the losses from Wednesday, when the Dow fell nearly 180 points on gloomy manufacturing data and news that euro-zone officials failed to agree on a rescue plan for Greece.
The losses have been part of a steady weakening in U.S. stocks since the start of May, with the major indexes on track to decline for a seventh straight week. The S&P is within 15 points of going negative for 2011. The index opened the year at 1,257.64.
Natural-gas pipeline company Energy Transfer Equity will buy Southern Union for $7.9 billion U.S. The news sent shares of Southern Union up 17%.
Shares of Finisar slumped 16% after the fiber-optic equipment maker released results late Wednesday, forecasting first-quarter earnings to be significantly lower than estimated.
Supermarket chain owner Kroger said quarterly earnings rose to 70 cents U.S. a share, beating analysts' expectations for 64 cents U.S. per share. Shares were up 5%.
After the closing bell, BlackBerry maker Research in Motion will report quarterly results, which are forecast to come in at a profit of $1.32 U.S. a share.
Economically speaking, stocks briefly turned negative after the Federal Reserve Bank of Philadelphia manufacturing survey unexpectedly declined to a reading of minus 7.7 in June while economists had forecasted a reading of plus 7, according to Briefing.com
But with the exception of the Philly Fed survey, investors did have several better-than-expected economic data to mull over -- with initial unemployment claims from the U.S. Labor Department, as well as May housing starts and building permits from the Commerce Department, both coming in stronger than expected.
The government reported that jobless claims slipped to 414,000 last week, down 16,000 from the prior week. Economists had expected a more modest decline in weekly claims to 421,000.
Housing starts jumped 3.5% in May to a seasonally adjusted annual rate of 560,000. They were forecast to have risen to a 540,000 annual rate in May, from 523,000 in April.
Building permits also beat expectations, rising 8.7% to a seasonally adjusted annual rate of 612,000 in May, from the prior month's rate of 563,000. Economists had expected
The price on the benchmark 10-year U.S. Treasury gained ground, with yields falling to 2.91%, from Wednesday’s 2.97%. Treasury prices and yields move in opposite directions.
Oil for July delivery were flat at $94.85 U.S. a barrel, after dropping more than 4% on Wednesday and hitting the lowest level since February.
Gold futures for August delivery rose $4.60 to $1,531 U.S. an ounce.
