Market battered by commodity slide

Wed Oct 22, 2008 6:11pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Toronto Stock Exchange's main index closed nearly 6 percent lower on Wednesday as resource issues sank along with commodity prices on concerns that a global economic slowdown will slash demand.

The decline adds to Tuesday's 4.4 percent loss as the threat of recession battered commodity prices across the board.

The resource-laden materials group swooned 11.1 percent as gold futures fell to their lowest in over a year and base metal prices retreated. Miner Agnico-Eagle was down nearly 25 percent and Potash Corp of Saskatchewan fell more than 7 percent.

The big oil and gas sector declined 9.1 percent as oil prices dropped anew on rising U.S. fuel inventories. Canadian Natural Resources set the pace with an 11 percent decline.

Worries over corporate results also dominated as the quarterly reporting season got under way. Investors are waiting to see if companies on both sides of the borders are meeting estimates or if they are guiding market expectations lower.

Vitran Corp fell 4.3 percent to C$12.31 after the transportation company said quarterly profit was hurt by an economic slowdown and pricing pressures.

"We are in the teeth of the earnings season and many companies are going to report disappointing numbers and analysts are going to take down those numbers," said George Vasic, equity strategist at UBS Securities Canada.

"Even though people knew that was on the horizon as we moved into October, it's still jolting when it occurs."   Continued...

<p>People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch</p>