The Toronto stock market was sharply lower Wednesday as commodity prices retreated amid more signs the global economy is hitting the brakes.
The S&P TSX Composite Index ended Wednesday down 223.48 points, or 1.9%, to 11,571.71
The Canadian dollar slumped 0.90 cents to 95.41 U.S. cents.
The financial sector fell on a report that some of Canada’s largest financial institutions will be among those subject to a new round of stress tests by the U.S. Federal Reserve to determine if major U.S. banks can withstand a downturn in the economy. The Globe and Mail said among them are the U.S. operations of Royal Bank of Canada and Bank of Montreal.
Royal Bank was off $1.03 to $43.90 and Bank of Montreal fell eight cents to $56.20.
The energy sector down plunged, as Suncor Energy fell $1.41 to $29.01 and Cenovus Energy lost $1.12 to $30.42.
Production from an upgrader at the Syncrude oilsands mine was disrupted Tuesday, and Canadian Oil Sands Ltd., the biggest partner in the sprawling project, said work was underway to get the processing plant running again. The company said the shutdown was the result of an "instrumentation failure" at a coking unit.
Canadian Oil Sands shares were off 12 cents at $19.40.
The base metals component fell as metals also sold off with the December copper contract on the Nymex down eight cents at $3.26 U.S. a pound. Teck Resources lost $1.38 to $33.02 and Quadra FNX Mining declined 54 cents to $9.41.
Bullion prices also retreated as Barrick Gold Corp. faded 75 cents to $50.23.
ON BAYSTREET
The TSX Venture Exchange jettisoned 32.77 points to 1,522.15, while the Nasdaq Canada index faded 12.57 points to 376.44.
Among the 14 Toronto subgroups, only telecoms made their way into positive territory, and only 0.01% at that.
Everything else went into the dungeon, most notably, metals and mining, which plunged 3.5%, while energy lost 2.8% and global base metals slipped 2.6%.
ON WALLSTREET
In New York, stocks slid deep in the red Wednesday, as euro-zone fears rumbled on and a preliminary report showed that Chinese manufacturing slowed sharply.
The Dow Jones Industrials ended Wednesday down 236.17 points, or 1.7%, to close a short week at 11,257.50. The selling was broad, with nearly all 30 components of the blue-chip index losing ground.
Bank of America was the biggest loser on the Dow, with shares sliding 4% and hitting their lowest level since March 2009, after a report in The Wall Street Journal on Tuesday stated the bank was having difficulty meeting U.S. financial regulatory requirements.
The S&P 500 dipped 26.25 points, to 1,161.79, while the Nasdaq Composite staggered 61.20 points to 2,460.08. U.S. markets are closed tomorrow for Thanksgiving.
Late Tuesday, the Federal Reserve ordered the top 31 U.S. banks -- with assets of $50 billion U.S. or more -- to participate in stress tests that will simulate another financial crisis.
Tests will simulate a more severe global financial meltdown for six banks with the largest trading operations: Bank of America, Goldman Sachs, Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo
Shares of many of those financial giants took a hit Wednesday. JPMorgan Chase, Citi and Morgan Stanley shares all dropped more than 2%.
Shares of Groupon tumbled 14%, to $17.20 U.S. a share -- well below its initial public offering price of $20 U.S. The Internet deal site's stock has been pummeled this week -- along with other newly public startups like LinkedIn -- on renewed dot-com bubble concerns and worries of overvaluation.
John Deere reported full-year earnings that hit a record $2.8 billion U.S., and posted fourth-quarter net income that blew past expectations. Shares of the equipment maker climbed more than 3%, making it one of the strongest performers in the S&P 500.
A lackluster report on the U.S. job market added to the gloomy mood on Wall Street.
Investors were rattled by a disappointing auction of German bonds. The debt of Europe's largest and most healthy economy is often considered the gold standard of euro-zone sovereign debt, and yields have managed to hold near record lows. But the dismal auction results raise concerns.
The European Commission published a green paper on stability bonds Wednesday to help allay those worries, outlining proposals to fix the euro-zone's debt crisis. However, skepticism remains about how effective these plans will be.
Meanwhile, Chinese manufacturing activity fell to a 32-month low, heightening fears that the euro-zone's problems are spreading beyond Europe and adding to worries about a global economic slowdown.
Economically speaking, the U.S. government released several economic reports Wednesday including jobless claims, personal spending and income, and durable goods.
The number of people filing for initial unemployment benefits rose 2,000 in the latest week to 393,000. Analysts surveyed by Briefing.com expected 391,000 jobless claims for the week ending November 19.
Personal income climbed 0.4% in October, while personal spending grew 0.1%. Analysts had expected both measures to rise 0.3%.
Meanwhile, orders of durable goods slipped 0.7% in October -- slightly less than the 0.9% drop economists had been expecting.
The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down 1.88% from Tuesday’s 1.94%. Treasury prices and yields move in opposite directions.
Oil for January delivery slipped $1.66 to $96.35 U.S. a barrel.
Gold futures for December delivery fell $6.50 to settle at $1,695.90 U.S. an ounce.
