The Toronto stock market closed down nearly 300 points Friday as investors took in weaker than expected Canadian jobs figures and appeared unmoved by speeches from the U.S. President and Federal Reserve Chairman.
The S&P/TSX Composite Index pointed downward 296.42 points, or 2.3%, to 12,387.54
The Canadian dollar backtracked 0.60 of a cent to 100.47 cents U.S.
While Canadian jobs data was disappointing, the Canadian market is faring better than those in the U.S. and much of the negativity is driven by traders reacting badly to measures for job growth laid out in Obama’s speech Thursday night, according to some experts. They add that the TSX is still up about 10% from where it was last September, and that a recovery takes time.
In Canadian corporate news, Lululemon Athletica Inc. says second-quarter net income rose to $38.6 million from $21.7 million in the comparable period a year ago. Revenue increased 39% to $212.3 million from $152.2 million. Shares fell $2.10 to $54.94.
Scotiabank is buying nearly 20%of a Chinese bank in a deal worth about $719 million. Shares lost $1.18 to $51.63.
The board of Cold-FX flu remedy maker Afexa Life Sciences Inc. has given its final stamp of approval to a friendly $76-million takeover bid by Valeant Pharmaceuticals International Inc.
Afexa shares were flat at 73 cents each, while Valeant shares lost $1.43 to $40.74.
And Wi-LAN Inc. said it was disappointed the board of directors of Mosaid Technologies Inc. has recommended its shareholders reject its takeover offer of $38 per share. Mosaid shares lost 33 cents to $39.67, while Wi-LAN shares sifted off 19 cents to $6.96.
On the economic front, Statistics Canada reported the country shed jobs during August and the jobless rate edged up 0.1 percentage points to 7.3%. Employers unexpectedly cut 5,500 positions in August, the second month in a row that job growth has stalled.
Elsewhere, Canada Mortgage and Housing Corporation reported that Canadian housing starts fell 9.7% to an annual rate of 184,700 in August, with every region but the Prairies posting declines. Experts were looking for a rate of about 200,000.
ON BAYSTREET
The TSX Venture Exchange lost 19.04 points to 1,785.10, while the Nasdaq Canada index fell back 20.78 points to 513.23
All 14 Toronto subgroups were in the red at the close. Metals and mining dipped 4%, energy stocks drifted 3.5% lower, while global base metals were off 3.1%
ON WALLSTREET
In New York, stocks ended sharply lower Friday, as bad news out of Europe kept piling up. The selloff triggered the sixth weekly decline in seven weeks for the Dow and S&P 500
The Dow Jones Industrials slumped 303.68 points, or 2.7%, to 10,992.10. At its lowest points, the blue-chip index was down 359 points
The S&P 500 docked 31.67 points to 1,154.23, while the Nasdaq gave back 61.15 to 2,467.99.
The day's steep losses pushed all three indexes to end in the red for the week. The Dow declined 2.2%, the S&P fell 1.7% and the Nasdaq slipped 0.5%.
McDonald's stock fell 4%, making it among the worst performers on the Dow. The fast-food chain's same-store sales for August fell short of analysts' expectations.
Retailer Lululemon Athletica beat expectations, reporting quarterly earnings of 26 cents U.S. per share. But its shares dropped 5.7% on weak guidance.
Kroger topped estimates with a profit of $281 million U.S. for the second quarter, and the supermarket chain also reiterated its full-year guidance. But Kroger's stock fell 5.7% as the company's costs continued to rise and cut into profit margins.
Shares of Bank of America slipped 3%, after a Wall Street Journal report said the bank may increase layoffs to 40,000 from the 30,000 job cuts previously reported.
Just before the opening bell, the European Central Bank announced that executive board member Juergen Stark was stepping down. Analysts say Stark is leaving amid disagreements over the ECB's bond-buying program.
Selling gained momentum midday as investors also grew increasingly concerned about a possible Greek default.
Reports said Germany is preparing to shore up its banks to protect them against a Greek default.
If Greece's bonds become worthless, that can trigger capital-requirement problems, and a lot of major banks could go under, according to some experts.
Stark's departure along with Bank of Italy Gov. Mario Draghi taking over from ECB President Jean-Claude Trichet in November (Trichet is retiring) raises questions about how the region will handle its ongoing sovereign debt problems.
Economically speaking, investors also digested President Obama's stimulus plan that he says will boost hiring and provide a jolt to the stalled economy if it becomes law. A mix of $253 billion U.S. in tax cuts and $194 billion U.S. in new spending, the total bill for the plan is $447 billion U.S.
Investors also continued to mull over also Federal Reserve chairman Ben Bernanke's speech delivered Thursday afternoon. Stocks ended sharply lower Thursday, as investors signaled disappointment that the Fed chief didn't offer up any new solutions to the nation's economic slowdown.
Meanwhile, wholesale inventories rose 0.8% in July. Economists were expecting the figure to increase 0.7% after rising 0.6% in June.
The 10-year yield fell to a record low of 1.89% from 1.99% late Thursday, amid sharp price hikes. Prices and yields for Treasurys move in opposite directions.
Oil for October delivery tripped $2.62 to $86.88 U.S. a barrel.
Gold prices added $2, or 0.1% to $1,859.50 U.S. an ounce.
