October 9, 2012 / 12:47 PM / 6 years ago

TSX ends at two-week low after IMF warning

TORONTO (Reuters) - Canada’s main stock index marked its lowest close in almost two weeks on Tuesday, tracking a sell-off in world equity markets after the IMF said the global economic slowdown is worsening.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

All 10 of the index’s sectors fell on a wave of negative signals, including the stark warning from the IMF as it cut its growth forecasts for the second time since April and warned U.S. and European policymakers that failure to fix their economies’ ills would prolong the slump.

Commodity and financial shares were among the hardest hit. Barrick Gold (ABX.TO) sank 3.7 percent to C$39.60, Goldcorp Inc (G.TO) lost 3.9 percent to C$43.45, and Manulife Financial (MFC.TO) fell 3 percent to C$11.95.

“I think the IMF (report) is what people are paying attention to. But it struck me as being a little bit late ... current economic news coming out of the U.S. has been a little bit better rather than worse,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Other news from Europe also kept investors on edge as uncertainty about when Spain will apply for a bailout worried markets, as did concerns about Greece’s debt load.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 145.42 points, or 1.17 percent, at 12,273.57. It was its weakest close since September 26.

Looking ahead to Wednesday, investors are expected to take their cue from U.S. aluminum producer Alcoa Inc (A.N), which kicked off earnings season after Tuesday’s market close. Alcoa’s third-quarter results beat Wall Street estimates even though it reported a net loss.

Technology shares will also be in the spotlight after brokerage downgrades of Intel and other major companies. .N

Analysts forecast third-quarter earnings of S&P 500 .SPX companies will drop 2.3 percent from the year-earlier quarter, according to Thomson Reuters data, which would be the first drop in U.S. quarterly earnings in three years.

“I think people should expect, at best, flat year-over-year earnings for the third quarter,” said Pat McHugh, Canadian equity strategist at Manulife Asset Management.

“The economic cycle began in the middle of 2009, so we’re in our third year now. At this stage of the economic cycle, earnings don’t grow fast, earnings tend to slow down, profit margins have rolled over.”

In other company news, Research In Motion RIM.TO tumbled 5.5 percent to C$7.62 after an analyst warned that the company’s make-or-break line of new BlackBerry smartphones is unlikely to hit store shelves until March, weeks later than investors had hoped.

Reporting by Claire Sibonney; Editing by Peter Galloway

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