Mar. 3, 2009 (Baystreet.ca) --
12:28 pm EST
The Toronto stock market tumbled yet again by midday Tuesday, with investors showing little inclination to bargain hunt a day after punishing losses while the Bank of Canada cut its key rate by half a percentage point.
Positive earnings from Scotiabank and Bank of Montreal were not enough to arrest the downward trend.
Toronto's S&P/TSX composite index lost some of its early excitement, and some ground, registering 144.39 points to the bad by noon time, to 7,543.12.
The central bank cut its key rate to 0.5%, the lowest ever, aiming to mitigate the worst effects of a rapidly worsening downturn.
Its statement said the outlook for the global economy has continued to deteriorate, with weaker-than-expected activity in major countries.
The Toronto financial sector was off but Bank of Nova Scotia shares were up 11 cents to $27.14 after it reported higher profits Tuesday while leaving its dividend untouched. Revenue growth in its three primary business lines helped boost earnings 1% from a year ago to $842 million, although return on equity dropped to 16.9% from 18.3% a year ago.
The Bank of Montreal reported a profit of $225 million, down 12% from a year ago, pulled lower by charges related to challenging capital markets. BMO said credit-loss provisions swelled to $428 million from $198 million, but its dividend also is unchanged and its shares rose 29 cents to $27.28.
Elsewhere in the group, insurer Manulife Financial lost 49 cents to $11.09. The insurer's share price has been hammered by speculation about its financial solidity and its stock is down from $20 at the start of February.
Royal Bank fell 33 cents to $29.64.
Still with the banks, Tiff Macklem, Canada's associate deputy minister of finance, said today that the country's banks are "well-capitalized." He added that government measures to help lending are not "bailouts," and that Canadian businesses are facing tighter credit conditions.
The energy sector went south, too, although Suncor Energy Inc. advanced 80 cents to $24.55 and Canadian Natural Resources climbed $1.14 to $37.69.
In the base metals sector, Ivanhoe Mines was ahead 31 cents to $6.19.
Among industrials, Bombardier Inc. gained 13 cents to $2.68.
Magna Entertainment Corp. says its class A shares will be delisted at market close on April 1 for failing to meet the continued listing requirements of the Toronto Stock Exchange. Its shares were unchanged at 35 cents, a long way from its 52-week high of $17.
The Canadian dollar lost 0.22 cents to 77.22 cents U.S. Canada's currency depreciated to the weakest in three months after the Bank of Canada cut borrowing costs to the lowest on record and signaled it may use policies beyond interest rates to spur economic growth.
BAYSTREET
At high noon, all of the 13 TSX sub-groups were lower. Financial stocks weighed on the markets by losing 4.1%, while health-care stocks were off 3.7% and real-estate stocks were down 3.2%.
The TSX Venture Exchange was 10.03 points to 818.21 while the Nasdaq Canada index picked up 4.66 points to 384.55
ON WALLSTREET
The Dow Jones Industrials index suffered a fizzle of early gains, and lost 34.64 points to greet midday at 6,728.95, on top of yesterday's loss, resulting in a fresh 12-year low.
The Standard & Poor's 500 index collapsed 7.25 points to 693.57, courting a new 12-year low of its own, while the NASDAQ composite index gave back 8.09 points to 1,314.76.
On the economic front, pending home sales sank to a record low in January, according to a National Association of Realtors report released Tuesday morning. Sales fell 7.7% versus forecasts for a drop of 3.5%, according to a consensus of economists surveyed by Briefing.com.
Sales rose a revised 4.8% in December.
February sales from the nation's automakers were also due throughout the session.
President Obama's budget was in focus Tuesday.
Federal Reserve Chairman Ben Bernanke was testifying before the Senate Budget Committee on economic and budget challenges. In prepared remarks, he urged lawmakers to move aggressively to get the economy out of its slump, even if it balloons the federal deficit.
In company news, Citigroup's CitiMortgage will lower home loan payments for three months and waive fees for some borrowers who are unemployed. The troubled financial company has received billions in federal aid and on Friday made a deal for the government to control as much as 36% of Citi's common stock. Shares rallied 6%.
U.S. light crude oil for April delivery rose 61 cents to $40.76 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery fell $24.40 to $915.60 U.S. an ounce.