The Toronto stock market was substantially lower Thursday while commodity prices fell back as worries about the European debt crisis settled on Spain.
The S&P/TSX composite index got walloped 258.93 points, or 2.1%, to end the session at 11,915.43
The Canadian dollar fell 0.45 cents to 97.20 cents U.S.
Markets were weak after the results of a Spanish debt auction soured moods. The country paid just over 7% to raise €3.56 billion in 10-year bonds, the highest rate since 1997 and a level seen as unsustainable over the long term. Demand was relatively weak and the interest rate was much higher that the 5.5% that was demanded at an auction of 10-year bonds on Oct. 20.
Oil prices headed lower after initially surging in the wake of a deal involving Enbridge Inc. that will see the Canadian pipeline company pay $1.15 billion U.S. to buy half ownership of a U.S. pipeline system.
Enbridge said the direction of crude oil flows in the Seaway pipeline will be reversed to enable it to transport oil from the main oil supply hub at Cushing, Okla., to the Gulf Coast. That would help unclog a glut of supply at Cushing, which has recently driven down the price for oil. Enbridge shares gained $1.02 to $35.93
The TSX energy sector was flat as Suncor Energy fell 93 cents to $31.82 and Talisman Energy lost 82 cents to $13.29.
The gold sector lost ground as Barrick Gold Corp. shed $1.99 to $50.66 and Goldcorp Inc. gave back $1.14 to $52.38.
The base metals sector was off as metal prices also fell heavily with the December copper contract down six cents to $3.43 U.S. a pound. Quadra FNX Mining was down 57 cents to $10.19.
The industrials sector fell as Canadian Pacific Railway shed 88 cents to $60.63.
The financials sector also contributed to the weak TSX showing as Scotiabank dropped $1.42 to $49.32.
On the acquisition front, frozen seafood giant High Liner Foods Inc. is buying Icelandic Group’s U.S and Asian processing plants for about $230.6 million U.S. Icelandic Group is one of the largest suppliers of value-added seafood to the U.S. food service market. High Liner shares rose 49 cents to $14.99.
In earnings news, Canadian Satellite Radio Holdings Inc., parent of XM Canada and Sirius Canada, posted a deeper fourth-quarter operating loss of $3.5 million from $2.6 million. Revenue grew to $61.4 million from $54.1 million. Its shares were up 33 cents at $3.50.
Economically speaking, figures released this morning by Statistics Canada reported that foreign investors added $7.4 billion of Canadian securities to their holdings in September, led by acquisitions of federal Treasury bills. On the other side of the coin, Canadian investment in foreign securities slowed to $718 million and remained focused on foreign stocks.
Elsewhere, the number of people receiving regular Employment Insurance benefits fell by 15,400, or 2.7%, to 549,300 in September, according to the nation’s number-crunchers, continuing a year-long downward trend.
ON BAYSTREET
The TSX Venture Exchange ducked back 34.01 points to 1,599.21, while the Nasdaq Canada index shrank 7.49 points to 402.51.
All but one of the 14 Toronto subgroups drooped on the day, metals and mining suffering the most at 4.5%, while materials sliced off 4.3%, and gold tumbled 3.7%
Only health-care stocks held out against the negative tide, gaining 0.8%.
ON WALLSTREET
In New York, stocks fell sharply Thursday as jumpy investors responded to a flurry of headlines and market talk.
The Dow Jones Industrials fell back 134.86 points, or 1.1%, by the closing bell to 11,770.73
The S&P 500 skidded 20.78 points, to 1,216.13, while the Nasdaq Composite Index moved down 51.62 points to 2,587.99.
The selling gained momentum after the S&P 500 fell below 1,225, a key technical level that had been the recent moving average.
Shares of Sears fell after the company posted a $421-million U.S. quarterly loss before the opening bell Thursday. The retailer reported same-store sales fell 0.7%, missing expectations.
J.M. Smucker posted a much bigger loss than expected Thursday, due to higher costs.
Angie's List, an online provider of consumer reviews, sold 8.8 million shares for $13 U.S. apiece in an initial public offering. Shares surged 33%.
Auto parts supply Delphi Automotive returned to the public market, selling 24 million shares at $22 U.S. apiece. The stock was down 1.3% in morning trading.
Data storage company NetApp reported late Wednesday that quarterly sales numbers missed analysts' expectations. Shares plunged 10%.
Bank stocks, which sank Wednesday following the release of the Fitch report, continued their declines Thursday. Shares of Citi and Morgan Stanley both fell at midday.
Shares of semiconductor company Rambus lost more than half their value on Wednesday, after the company failed to convince a jury that its competitor, Micron Technology, had committed anti-trust violations. Micron's shares rebounded Thursday.
Traders said markets remains on edge as the euro-zone debt crisis appears to be spreading to larger economies in Europe.
Yields on Italian, Spanish and French government bonds have been rising this week amid doubts that E.U. policy makers will be able to resolve the euro-zone debt crisis.
Some traders said the selling was driven by a possible breakdown of debt reduction talks in Washington. And comments from Federal Reserve officials also appeared to catch the market off guard.
Traders also said light trading volumes and options expirations on Friday may be driving the move lower.
The retreat came despite a series of better-than-expected economic reports this week, including strong data on retail sales, industrial production and manufacturing activity.
On Thursday, the government released data on unemployment and construction that topped forecasts.
Economically speaking, initial U.S. jobless claims came in lower than expected at 388,000 for the week ending November 12. The latest week's numbers are still down from 390,000 from the week prior, the lowest since April.
Elsewhere on the ledger, the number of housing building permits jumped to a seasonally adjusted annual rate of 653,000 in October, up 10.9% from the revised rate of 589,000 in September, the U.S. Commerce Department said Thursday. That was much higher than expected, with economists surveyed by Briefing.com looking for a 603,000 annual rate.
Construction of new homes ticked slightly lower during the month. The Commerce Department also said housing starts edged down 0.3% to an annual rate of 628,000 units in October, down from a revised 630,000 in September.
The Philadelphia Fed's Business Outlook Index still showed growth in the region, but barely, slipping to 3.6 in November from 8.7 the previous month.
The price on the 10-year Treasury spiked, driving the yield down to 1.96% from Wednesday’s 2.02%. Treasury prices and yields move in opposite directions.
Oil for October delivery drooped $3.26 to $99.33 U.S. a barrel
Gold futures for December delivery fell $52.70 to $1,721.60 U.S. an ounce.
