The end of the week and the end of the month saw stocks in freefall in both Toronto and New York, as traders digested a lot of (mostly bad) news.
Investors also mulled over the impact of "buy-America" restrictions in the economic stimulus package passed by the U.S. House of Representatives.
The Dow Jones industrial average and Standard & Poor's 500 finished their worst January ever Friday as investors eyed abysmal reports on economic growth and quarterly earnings.
The S&P TSX Composite Index closed the day down 99.81 points, to 8,662.95.
On the economic front, Statistics Canada said the gross domestic product fell 0.7% in November, with declines moving across almost all sectors.
Manufacturing, wholesale trade, construction and real estate led the decline.
The TSX financial sector moved back 1.15% as Scotiabank gave back 52 cents to $29.33 while CIBC fell $1.12 to $45.59.
However, the sector is up for the week on hopes that the U.S. will create a "bad" bank to buy up toxic or illiquid assets from American banks. The Wall Street Journal reported that top economic officials are mulling a plan that would use a two-pronged approach of buying a portion of banks' "bad" assets while also guaranteeing against future losses on some of the remainder.
The energy sector was off 1% as Petro-Canada shed $1 to $26.56 and Canadian Natural Resources declined 48 cents to $43.76.
Enerplus Resources Fund said low oil prices are prompting it to reduce distributions for the second time in as many months, to 18 cents per unit from 25 cents. Its units were $1.12 to $25.63.
The TSX gold sector was up 1.5%. Goldcorp Inc.advanced 58 cents to $36.69.
Base metals were lower. Teck Cominco Ltd. moved down 32 cents to $4.91.
Ottawa-based chipmaker Zarlink Semiconductor Inc. was unchanged at 27 cents after it earned $12.1 million U.S. in its most recent quarter, up from an $8.4-million loss a year ago.
Nortel Networks Corp.is getting out of the mobile WiMax business, ending its joint venture with Alvarion Ltd. Nortel, which is restructuring under court protection from creditors, said the decision will help narrow its focus and better manage its investments to strengthen its business.
The Canadian dollar lost 0.78 cents to $81.65 cents U.S., off its lows for the day.
BAYSTREET
Eleven of the 13 TSX sub-groups moved lower, metals and mining off 3.5%, followed by industrials, off 2% and materials, off 1.8%
Health care gained 1.8% and consumer staples improved 0.9%, as the only two sub-groups ahead on the day.
The TSX Venture Exchange moved up 2.09 points to 882.63, while the NASDAQ Canada index advanced 2.87 points to 547.97
ON WALLSTREET
The Dow Jones industrials index slid a further 148.15 to 8,000.86. The Standard & Poor’s 500 index dove 19.25 points to 825.89. The NASDAQ composite index was 31.42 points down, to 1,476.42
Washington said the U.S. economy shrank at a 3.8% pace at the end of 2008, the worst showing in a quarter-century. That is a much faster clip than the 0.5% decline logged in the third quarter but better than the 5.4% slide that had been expected.
Consumer-products company Procter & Gamble Co. said its fourth-quarter profit rose, boosted by a gain from the sale of its Folgers coffee business. But its sales dipped 3% on weakening demand for its products, which include Tide detergent, Olay skin cream and Crest toothpaste and its shares fell $2.26 to $55.96 U.S.
Caterpillar Inc. helped drag U.S. markets lower. Its shares fell $1.19 to $30.66 U.S. after it announced 2,110 new job cuts, following other cost-cutting actions earlier this week.
Also Friday, Honda Motor Co. slashed its 2009 profit target by more than half as its earnings dropped 90% in the latest quarter, hit by rising costs and falling sales in key markets. Its shares dipped $1.29 to $22.95 U.S.
There was better news from online retailer Amazon.com Inc. Its fourth-quarter profit rose 9% and easily surpassed analysts' forecasts. Those results, plus an optimistic forecast, sent its shares up $9.42 to $59.42 U.S.
Exxon Mobil reported a profit of $45.2 billion U.S. for 2008, breaking its own record for full-year earnings by a U.S. company. But fourth-quarter profits tumbled 33% as oil prices plunged 60% during the period. Its shares climbed 96 cents to $77.96.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.83% from 2.86% Thursday. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
U.S. light crude oil for March delivery rose 42 cents to settle at $41.86 a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery rose $21.90 to settle at $928.40 an ounce.
