3 Min Read
* TSX down 2.08 percent at 10,368.27
* Energy sector down 3.4 pct as oil pulls back
* Bombardier down 7.5 pct after results (Adds details, quote)
By Jennifer Kwan
TORONTO, June 3 (Reuters) - Toronto's main stock market index fell sharply on Wednesday morning as falling oil and gold prices put downward pressure on the resource-laden index and U.S. data dampened optimism about economic recovery.
A major driver to the downside was a drop in the price of oil to below $68 a barrel after a recent rally. [ID:nSP477138]
"We've had a pretty good runup in energy recently so I think people are beginning to take some profits," said Michael Sprung, president at Sprung & Co Investment Counsel.
"I would suspect a lot of that runup was based on a expectation that maybe the economy is turning around faster than it is."
The Toronto index, which has raced up nearly 40 percent from its March lows, followed world stocks lower on Wednesday as optimism cooled that the global economy is recovering. [MKTS/GLOB]
That caution was bolstered by a U.S. report that showed private employers cut more than 500,000 jobs in May, a sign that job conditions remain tough. [ID:nN03546607] Weaker-than-expected factory orders and services data also weighed. [ID:nN0327366]
"It's the continuation of the volatile reactive market we've seen. So it's reacting to a little bit of bad economic news," Sprung said.
At 10:27 a.m. (1427 GMT), the S&P/TSX composite index .GSPTSE was down 220.52 points, or 2.08 percent, at 10,368.27, with 10 of its 10 main groups lower.
Also weighing on the market was Bombardier Inc (BBDb.TO), which reported a 31 percent drop in quarterly profit on Wednesday and said cancellations in business aircraft have outpaced the level of new orders. [ID:nBNG426045] Bombardier shares, the most heavily traded stock on a volume basis, dropped 7.5 percent at C$3.58.
The resource-laden materials group, home to miners and fertilizer companies, dropped 2.7 percent. Agrium (AGU.TO) fell 4.4 percent to C$50.62.
The agricultural products retailer and fertilizer reaffirmed its offer to buy U.S. rival CF Industries (CF.N) on Wednesday, in a bid to increase the size of its fertilizer business and expand its distribution network. [ID:nN03495472]
The index's financial sector dropped 1.8 percent, with Manulife Financial (MFC.TO) down 2.1 percent at C$23.69.
$1=$1.10 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway