TSX drops for third day as jitters gain the upper hand

Mon Apr 7, 2014 5:15pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index fell sharply on Monday, retreating for a third straight session, as increasing nervousness about the durability of recent market gains joined with sluggish commodity prices to drag down most of the index's major sectors.

Stock markets also were still digesting disappointment over Friday's U.S. labor market data, which showed a gain in jobs in March that fell short of market expectations.

Uncertainty about what the jobs figures would mean for Federal Reserve policy and the timing of any U.S. interest rate rise boosted market volatility, fueling a selloff in U.S. stocks, and undermining the Canadian market, where insurers were hit hard for a second straight session.

The S&P/TSX VIX index .GSPVIXC, which gives a glimpse of the level of market volatility, shot up 15 percent.

"It's the spillover effect of weakness in the United States," said Elvis Picardo, a strategist at Global Securities in Vancouver. "It certainly seems like we're going to be in for a sustained period of more volatility."

Investors can no longer expect weeks to go by without any significant decline, he added. "Those days are over."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 122.77 points, or 0.85 percent, at 14,270.33.

The benchmark index is up about 4.8 percent this year.   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch