Mar. 5, 2009 (Baystreet.ca) --
04:55 pm EST
Banks led the markets downward as sentiment was also affected by worries about General Motors' future, and China's commitment to stimulating its economy. The result was new lows on Wall Street and substantial losses on Toronto's Bay Street.
Toronto's S&P/TSX composite index suffered a 191-point tumble to finish the day's trading at 7,623.31
There had been hopes that China would use the start of the National People's Congress' annual session to announce new economic measures, in addition to the promised spending of $585 billion U.S. outlined in November.
But there was a sense of letdown after Chinese Premier Wen Jiabao said Thursday the government would help the world's third-largest economy grow by 8% this year, but stopped short of promising new measures.
The financial sector was down after undergoing a battering earlier in the week in the wake of a $62-billion U.S. loss at insurer American International Group, a U.S. corporate record.
Royal Bank declined 70 cents to $29.88 and CIBC shares were down $1.40 to $38.23 after it announced that it will raise up to $1.6 billion in a Tier 1 debt issue. It said that completion would take the bank's pro-forma Tier 1 capital ratio to about 11.5%.
Canadian Western Bank reported Thursday a first-quarter profit of $25.6 million, down 1% from a year-earlier $25.9 million, as the fallout of the economic downturn continued to pressure its earnings. Its shares gave back 91 cents to $9.69.
The TSX energy sector slid amid falling oil prices and earnings reports from some of the oilpatch's heavyweights - while another company filed for creditor protection.
Natural gas explorer and producer Canadian Superior Energy Inc. says it has filed an application with the Court of Queen's Bench of Alberta for protection from creditors under the federal Companies' Creditors Arrangement Act. Its shares plunged 21 cents to 28 cents.
Canadian Natural Resources Ltd. shares rose $2.41 to $40.95 after it said Thursday it was reducing its 2009 capital spending budget by $800 million in anticipation of a turbulent year marked by low commodity prices. The company recorded net earnings of $1.8 billion during the fourth quarter, up from year-earlier profits of $798 million.
Canadian Natural also said it was raising its annual dividend by 5% to 42 cents per share.
Shares in Talisman Energy Inc. drifted 11 cents lower to $11.37 after it said Thursday that net earnings for the latest quarter came in at $1.2 billion, up sharply from year-earlier profits of $656 million.
The base metals sector lost as Teck Cominco Ltd. stepped back 28 cents to $3.47.
Mongolia has submitted a draft agreement to allow Canadian mining company Ivanhoe Mines and Rio Tinto to mine at one of the country's largest gold and copper deposits. Ivanhoe shares inched 19 cents lower to $5.56.
In the gold sector, Goldcorp Inc. ran ahead $2.77 to $38.20.
The Canadian dollar backtracked 0.91 cents, to 77.54 cents U.S.
BAYSTREET
Of the 13 TSX sub-groups, 11 were down on the day. Financials were the chief drag on the market, off 5.2%, followed by industrials, down 4.2%, and real-estate, down 3.6%.
Gold led the two advancers, up 6.3%, materials were up 3.2%.
The TSX Venture Exchange was down 1.16 points to 829.79, while the Nasdaq Canada index stumbled 19.69 points to 388.67
ON WALLSTREET
The Dow Jones industrial average fell 281 points, or 4.1%, to close at 6,594.44, ending at the lowest point since April 15, 1997. Since hitting an all-time closing high of 14,164.53 on Oct. 9, 2007, the Dow has fallen 51.5% as of Wednesday's close.
The S&P 500 index lost 30 points, or 4.3%, closing at 682.55, the lowest finish since Sept. 18, 1996. Since hitting an all-time closing high of 1,565.15 on Oct. 9, 2007, the S&P 500 has fallen 54.5% as of Wednesday's close.
The Nasdaq composite fell 54 points, or 4% to close at 1,299.59, ending at the lowest point since 1279.24 on March 12, 2003, at the bottom of the previous bear market. Since hitting a bull-market high of 2,859.12 on Oct. 31, 2007, the Nasdaq has stumbled 52.5%.
Among the big losers, financials were hit especially hard, Bank of America, Citigroup, Wells Fargo and Morgan Stanley among the losers. Citigroup fell for a time below $1 a share, to its lowest level ever at 97 cents, before ending at $1.02 U.S.
Wells Fargo shares tumbled $1.61 to $8.05 U.S. while Bank of America slid 41 cents to $3.18 U.S.
JPMorgan saw its outlook lowered by Moody's to negative from stable and its shares fell $2.44 to $16.86 U.S.
Failed insurance giant AIG slumped 16% as U.S. regulators discussed the company's $180-billion U.S. bailout in a Senate hearing.
Concerns about the outlook for General Motors also weighed on stocks Thursday. GM said in its annual filing that there is substantial doubt about the automaker's ability to survive.
The company has sustained huge losses over the course of the recession and has already received $13.4 billion U.S. in federal loans. GM has said it needs additional federal money to stay afloat. GM shares fell 17%.
Wal-Mart Stores, the world's No. 1 retailer reported a bigger-than-expected jump in February sales, thanks in part to lower gas prices. Wal-Mart said that sales at stores open a year or more, a retail metric known as same-store sales, rose 5.1% in February versus forecasts for a rise of 2.4%.
Separately, the company said it is boosting its annual dividend by 15% to $1.09 from 95 cents per share. Wal-Mart shares rose 4%.
On the economic front, January factory orders fell 1.9% after falling 4.9% in the previous month. Economists surveyed by Briefing.com thought orders would fall 3.5%.
The number of Americans filing new claims for unemployment fell to 639,000 last week from 670,000 in the previous week, versus economists' forecasts for a drop to 650,000.
Another report showed that fourth-quarter business productivity was weaker than initially reported, falling at a revised 0.4% annual rate versus the initially reported 3.2% annual rate.
Economists thought it would grow at a 1.1% annual rate.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.82% from 2.98% Wednesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for April delivery fell $1.77 to settle at $43.61 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery rose $21.10 to settle at $927.80 U.S. an ounce.