NEWS

TSX opens to triple-digit loss on growth fears

07/12/2012 01:35 EDT | Updated 09/11/2012 05:12 EDT
Canada's benchmark stock index was sharply lower today on widespread weaknesses in commodity prices.

The S&P/TSX composite index shed 150 points to 11,394 early in the session. Almost all types of stocks were lower, with the energy index off 1.6 per cent, and metals and mining firms (down 2.8 per cent) leading the downward slide.

Shares that declined outnumbered shares that gained by more than a three to one margin.

Gold was down $18.80, with an ounce trading for $1,556.90. Oil lost $1.46 to trade at $84.35 a barrel in New York. Crude has plummeted from $106 in May amid expectations that a global slowdown led by Europe, the U.S. and China will undermine oil demand.

Loonie loses ground

The Canadian dollar lost 0.36 of a cent to trade at 97.69 cents US.

The catalyst for the commodity sell-off was the U.S. Federal Reserve signal, late Thursday, that economic conditions in the U.S. don't warrant another round of stimulus. That came on the heels of data out of China that showed growth in the world's second-largest economy was undeniably slowing.

China's economy grew at a 7.3 per cent annual pace in the past three months, down from 8.1 per cent the three previous months.

The general sense of gloom was enough to cause investors to largely ignore a brief bit of positive news on the jobs front.

The U.S. Labour Department said initial jobless claims dropped to 376,500 last week, better than expected and down to the lowest level since March 2008.

"Given slowing growth … we can't see payrolls improving too much," BMO economist Jennifer Lee noted.

U.S. exchanges put in a similar poor showing, with the Dow Jones Industrial Average off 82 points to 12,521 and the tech-laden Nasdaq 43 points lower to 2,844.

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