CANADA STOCKS-TSX suffers worst one-day loss in two years

Thu Aug 4, 2011 5:49pm EDT
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 * TSX down 435.90 points, or 3.4 percent, at 12,380.13.
 * Main index hits lowest level since Oct. 4
 * Biggest one-day drop since June 22, 2009
 * All sectors drop on economic woes, materials lead
 (Adds analyst comment, details)
 By Trish Nixon
 TORONTO, Aug 4 (Reuters) - Toronto's main stock index
suffered its biggest one-day loss in more than two years on
Thursday, as growing anxiety about the global economic outlook
prompted a wave of selling that slammed world markets.
 Investors around the world dumped stocks to rush to the
security of cash and government bonds, hammering equity indexes
to their lowest levels of the year on fears of a spreading debt
crisis and slowing growth. [MKTS/GLOB]
 "It seems like major panic," said Kate Warne, Canadian
market strategist at Edward Jones in St. Louis, Missouri. "I
think a lot of today's reaction is due to fear rather than due
to fundamentals."
 The intense selling reflected a frustration with
politicians' handling of debt crises in Europe and the United
States just large industrial economies show signs of running
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed the session down 435.90 points, or 3.4
percent, at 12,380.13. This marked its biggest one-day slide
since it fell more than 4 percent on June 22, 2009.
 It touched a session low of 12,322.06, its weakest point
since October 4, 2010. The intraday decline of more than 3.8
percent was deeper than the so called "flash crash" of May,
 "The market's out of its mind here, and we're into some
form of crazy panic selling," said Barry Schwartz, portfolio
manager at Baskin Financial Services.
 The sell-off was widespread, with all 10 of the TSX's main
groups lower. The heavyweight materials, energy and financial
sectors led the decline.
 Materials stocks, which include miners, fell 5.2 percent as
copper prices hit a one-month low and gold prices recoiled from
record highs. [MET/L][GOL/]
 The TSX's energy group lost 4.1 percent as U.S. crude fell
more than $5, stung by a rise in U.S. petroleum inventories and
worries about soft demand. [O/R].
 The financial sector was 1.6 percent lower despite healthy
earnings reports.
"Investors today are just paying no attention to the things
that are good news," added Warne.
 Insurers Sun Life Financial SLF.TO and Great-West Lifeco
GWO.TO were both down more than 1.5 percent despite reporting
better-than-expected second-quarter profits on Wednesday.
 IGM Financial IGM.TO reported a higher quarterly profit
on Thursday, but fell 1.5 percent to C$46.90.
 The biggest drag on the index was Valeant Pharmaceuticals
VRX.TO, which plunged 20.2 percent to C$40.22. The Canadian
company said on Thursday that new generic rivals cut into sales
for one of its top drugs, news which overshadowed a sharp rise
in quarterly earnings.  [ID:nN1E773076]
 Suncor Energy SU.TO, down 4.4 percent at C$33.12, and
Potash Corp POT.TO, off 4.72 percent at C$52.47, were also
among the heaviest weights.
 The index's biggest percentage decliner was debt-laden
Yellow Media Inc YLO.TO. Shares of the telephone directory
publisher plunged 43.3 percent to C$1.10 after the company
slashed its annual dividend by 77 percent and withdrew its full
year outlook. [ID:nL3E7J4381]
 Positive corporate earnings results from some of Canada's
largest companies did little to stem the losses.
 Canadian Natural Resources Ltd CNQ.TO reported a 43
percent rise in second-quarter profit and said it is poised to
restart its oil sands plant seven months after it went up in
flames. Shares of the country's biggest independent oil
explorer fell 1.7 percent to C$36.19. [ID:nL3E7J42J2]
 Top Canadian telecom company BCE Inc's BCE.TO  quarterly
adjusted earnings beat expectations, helped by strength in its
new media unit. It's stock was down 1.6 percent at C$36.13.
 Canada's two biggest airlines also reported
stronger-than-expected results, but their stocks fell with the
broader market sell-off. Air Canada ACb.TO lost 4.7 percent
to C$2.01, while WestJet Airlines WJA.TO slid 2.7 percent to
C$13.85. [ID:nN1E7730P4]    
  On Friday investors will be watching for the July U.S. and
Canadian jobs numbers, which could help turn market sentiment.
[ID:nN1E77115Y] [ID:nN1E7721H3]
 "Hopefully, job reports tomorrow will show some
stabilization and the market will regain its sanity, because
it's completely lost it," said Schwartz.
  ($1=$0.97 Canadian)
 (With additional reporting by Claire Sibonney; Editing by
Jeffrey Hodgson)