Toronto stocks slammed by oil slide, economic woes

Tue Jul 15, 2008 5:36pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

TORONTO (Reuters) - The Toronto Stock Exchange's main index plunged more than 380 points on Tuesday as resource issues were hit by weak oil prices, while worries over the global economy battered the wider market.

After logging a hefty intraday drop of more than 3 percent, the benchmark briefly halved its losses in the late afternoon, before retreating again to close at its lowest level in nearly two weeks.

The price of oil sank more than $6 to $138.74 a barrel as growing anxiety about the U.S. economy's health raised questions about world economic growth and demand for crude.

The sharp fall hit Bay Street's heavyweight energy sector, which lost 4.2 percent, with Canadian Natural Resources CNQ.TO down C$5.29, or 5.5 percent, at C$91.55.

Worries about demand for commodities also hurt the resource-heavy TSX's miners and fertilizer companies, which were all among the biggest laggards by weight.

The S&P/TSX composite index .GSPTSE closed down 383.73 points, or 2.79 percent, at 13,357.56 with all but one of its 10 main sectors in a downturn. The index fell as far as 13,256.16, or 3.5 percent, in the morning.

The outlook for the economy was in the forefront, after the Bank of Canada ratcheted up talk on inflation, saying that inflation could spike above 4 percent for the first time since 2003 next year, while it held interest rates steady at 3 percent.

Meanwhile, U.S. Federal Reserve Chairman Ben Bernanke said that financial markets were weighed down by the housing slump, and that the outlook for economic growth and inflation was unusually uncertain.

Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri, said that the central bank messages were consistent with each other.   Continued...