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 216.89 points, or 1.8%, to end the day at 11,543.05
The Canadian dollar let go of 0.50 cents to 96.21 cents U.S., as traders avoided risk and bought into U.S. Treasuries.
The TSX energy sector fell with Suncor Energy down 90 cents to $28.15 and Canadian Natural Resources gave back $1.62 to $35.07.
The base metals sector was down with metal prices off sharply as the March copper contract in New York was off 12 cents to $3.32 U.S. a pound. HudBay Minerals fell 21 cents to $9.80 and Teck Resources shed 44 cents to $35.08.
The gold sector was down as Barrick Gold Corp. faded $2.00 to $46.29 and Goldcorp Inc. lost 84 cents to $47.21.
All TSX sectors were in the red with the financials sector down. Bank of Montreal fell 54 cents to $55.04.
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 47 cents to $67.01.
Moody's has withdrawn its rating for Sino-Forest Corp.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 28 cents to $10.53 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, new motor vehicle sales were presented in Canada. 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 52.50 points to 1,405.93, while the Nasdaq Canada index was down 9.10 points to 364.25
All 14 Toronto subgroups stayed negative on the day. Health-care stocks were the sickest of the bunch, off 3.7%, materials sank 3.4%, and gold lost 3% of their luster.
ON WALLSTREET
In New York, stocks tumbled Wednesday as the European debt crisis continued to weigh on the markets and a stronger dollar dragged down commodities prices.
The Dow Jones Industrials doffed 131.46 points to close out a deflating session at 11,823.50.
The S&P 500 fell 13.95 points, to 1,211.78, while the Nasdaq Composite moved downward 39.96 points to 2,539.31.
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 started 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.
The euro was under pressure, breaching the key $1.30 level against the dollar and falling to its lowest level since mid-January.
The selloff came as investors anticipated further interest rate cuts from the European Central Bank, which lowered its benchmark rate to 1% earlier this month.
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 1.90% from 1.96% late Tuesday. Treasury prices and yields move in opposite directions.
Oil for January delivery shed $5.24 to $95.00 U.S. a barrel.
Gold prices sank $76.20 to $1,586.90 U.S. an ounce.
