TORONTO (Reuters) - Toronto's main stock index fell hard on Wednesday, weighed down by slumping commodity prices as well as unexpectedly weak North American economic data and by results from Goldman Sachsthat disappointed the market.
Copper prices retreated after hitting a record high, while U.S. crude oil prices eased for a second day. But the price of bullion rose for a third day.
"The euphoria that we've seen in the rise of these commodity prices may have been an overreaction to some of that news (about global demand)," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
"In the meantime, you're going to have these bumps in the road in terms of pricing."
Key decliners on the resource-heavy index included Potash Corp, down 3.66 percent at C$166.21, while Suncor Energy dropped 2.37 percent to C$37.87, and Talisman Energy fell 3.91 percent to C$22.10.
Teck Resources lost 2.32 percent to C$62.36 after it said that adverse weather and a rail traffic disruption would hold back its first-quarter coal sales.
Blue-chip advancers included several gold miners, including Kinross Gold, up 1.08 percent at C$16.88, and Agnico-Eagle, up 0.23 percent at C$69.65.
Nine of the index's 10 main sectors were lower, with the heavily weighted energy and materials groups both down more than 1 percent.
The Toronto Stock Exchange's S&P/TSX composite index dropped 120.16 points, or 0.89 percent, to finish at 13,439.04.
The decline unwound the advance on Tuesday, when the index shot to its highest point since early September 2008. The S&P/TSX composite has climbed steadily since last summer without many interruptions, though it is still well off its pre-financial crisis peak above 15,000.
"This market is due for a pullback and it's doing it a little bit today," said Levente Mady, market strategist at Union Securities in Vancouver. "It'll be interesting to see which way we lean tomorrow, whether we're just going to be a one-day wonder or something a little more substantial."
But he also noted recent put-and-call options activity as a sign of investor sentiment. Investors buy calls when they expect the market to rise, and puts when predicting a decline.
"People have been buying way more calls in the past little while than puts, so it's another sign of people being overly exuberant, thinking this rally is just going to continue on forever," he said, estimating there have been almost twice as many calls to puts recently.
Schwartz said that a pullback would be "healthy" at this time.
"This is a time for people to sit back and reflect on the risks going forward and as well as how well the markets have performed over time in the past six, seven months," he said.
"Specifically gold, oil, those things in our minds have topped out in the interim."
The index's hefty financials group fell 0.53 percent, weighed down by a drop in quarterly profit at Goldman Sachs Group, denting market optimism about a strong earnings season.
Toronto-Dominion Bank fell 0.55 percent to C$76.10, while Bank of Nova Scotia declined 0.83 percent to C$56.37.
U.S. housing starts and Canadian manufacturing sales data for November fell well below expectations, bruising sentiment toward economic recovery.
In individual company news, Viterra shares hit a 14-month high after quarterly earnings at the Canadian grain handler surpassed expectations. Viterra finished up more than 5 percent at C$11.07.
Additional reporting by Solarina Ho; editing by Peter Galloway