The Toronto stock market was sharply lower Wednesday as commodities sold off amid worries about the European debt crisis and disappointment that the U.S. Federal Reserve won't be offering new initiatives to help a slowly recovering U.S. economy.
The S&P/TSX Composite Index collapsed 183.36 points, or 1.6%, to approach midday at 11,576.58
The Canadian dollar let go of 0.58 cents to 96.13 cents U.S., as traders avoided risk and bought into U.S. Treasuries.
The TSX energy sector fell with Suncor Energy down 98 cents to $28.07 and Canadian Natural Resources gave back $1.21 to $35.57.
The base metals sector was down with metal prices down sharply as the March copper contract in New York was off 12 cents to $3.32 U.S. a pound. HudBay Minerals fell 36 cents to $9.65 and Teck Resources shed $1.17 to $34.35.
In the gold sector, Barrick Gold Corp. faded $1.55 to $46.74 and Goldcorp Inc. lost $1.17 to $46.93.
The financials sector was down as Bank of Montreal fell 50 cents to $50.08.
In corporate news, Agrium Inc. has quadrupled its semi-annual dividend to 22.5 cents per share.
The potash producer also approved capacity expansion of one million tonnes at its Vanscoy facility in Saskatchewan. Its shares slipped 74 cents to $66.74.
Moody's has withdrawn its rating for Sino-Forest Corp. The move by the ratings agency came less than two days after the troubled Chinese timberland owner said it would miss a significant interest payment due this week.
WestJet Airlines Ltd. declined six cents to $10.75 as the carrier announced that it has signed an interline deal with Japan Airlines that will make it easier for passengers to connect between the two airlines. Passengers will be able to link from Japan Airlines flights landing in Vancouver which will then connect to WestJet flights destined for Calgary, Edmonton, Kelowna, Montreal, Toronto and Winnipeg.
On matters economic, Wednesday is a busy day in Canada, what with new motor vehicle sales rolling in. Statistics Canada says the number jumped in October by 3.3% to 139,549 units, reflecting a greater number of new cars AND trucks being driven off the lots.
Manufacturing news was not so cheery. The nation’s number-crunchers said manufacturing sales fell 0.8% in October, ending a three-month win streak. The reduction in sales largely came from non-durable goods manufacturers, whose sales fell 1.8% in October.
Leading indicators rounded things out, with the figure ballooning 0.8% in November, the largest increase in five months. The manufacturing sector posted broad gains after slowing in recent months. Household spending was mixed, while the stock market continued to decline.
ON BAYSTREET
The TSX Venture Exchange dumped 54.16 points to 1,404.27, while the Nasdaq Canada index was down 10.17 points to 363.68
All 14 Toronto subgroups were negative at lunch hour. Materials sank 3.4%, metals and mining gave back 3.1%, and energy stocks demurred 3%.
ON WALLSTREET
In New York, stocks tumbled Wednesday as the European debt crisis continues to weigh on the market and a stronger dollar dragged down commodities prices.
The Dow Jones Industrials doffed 106 points at noon time to 11,840.90.
The S&P 500 fell 14.95 points, to 1,210.78, while the Nasdaq Composite moved downward 41.46 points to 2,537.81.
The selloff came as investors anticipate further interest rate cuts from the European Central Bank, which lowered its benchmark rate to 1% earlier this month.
Meanwhile, the U.S. dollar strengthened as the euro declined. The stronger dollar took a toll on commodities that are priced in the U.S. currency.
The drop in commodities hit shares of companies in the energy and materials sectors. Caterpillar, Alcoa and Exxon all fell.
Shares of First Solar tumbled, after the solar power equipment maker lowered its 2011 sales and earnings guidance.
Shares of Avon Products soared after the company announced it start a hunt for a new CEO and move its current chief executive into the executive chairman role.
Shares of electronics retailer Best Buy held steady after it got slammed Tuesday. Its quarterly earnings fell far short of forecasts.
Netflix's stock continued its nosedive from Tuesday, after spiking Monday on chatter that the company could be acquired by Verizon. A spokesman for Netflix said the company doesn't comment on speculation.
Investors remain nervous about the euro-zone debt crisis and increasingly tight credit conditions for banks across Europe.
Most European Union leaders have agreed in theory to form a fiscal compact aimed at strengthening budgetary discipline. But many investors say implementing the agreement could prove legally and politically difficult.
On Tuesday, stocks pulled back after a report said that German Chancellor Angela Merkel rejected suggestions to raise the funding limit for the European Stability Mechanism -- or ESM, which currently stands at €500 billion.
On the economic front, the U.S. Mortgage Bankers Association said mortgage applications for the week ending Dec. 10 rose 4.1%.
November import prices rose 0.7%, which is the largest monthly increase since April. Export prices ticked up 0.1%, according to the U.S. Bureau of Labor Statistics.
The price on the benchmark 10-year U.S. Treasury inched up, pushing the yield down to 1.92% from 1.96% late Tuesday. Treasury prices and yields move in opposite directions.
Oil for January delivery shed $4.44 to $95.70 U.S. a barrel.
Gold sank $45.30 to $1,617.80 U.S. an ounce.
