TORONTO -- North American stock markets turns sharply lower Friday in a broad-based decline that followed the release of disappointing economic growth figures on both sides of the border.
At midafternoon, the S&P/TSX composite index was down 84.29 points at 15,022.71 with most sectors lower except energy and gold as commodity prices turned higher. The loonie was unchanged at 80.42 U.S. cents.
Statistics Canada says the economy contracted at an annual pace of 0.6 per cent in the first three months of the year as weaker oil prices had a more severe impact than economists expected.
It is the first time real GDP has dipped below zero since the fourth quarter of 2011 and the biggest slide into negative growth since the second quarter of 2009.
The U.S. economy also contracted in the first quarter with gross domestic product weakening 0.7 per cent, far worse than the government's initial estimate of growth of 0.2 per. The Dow Jones industrial average was down 88.32 points at 18,037.80, while the Nasdaq fell 16.28 points to 5,081.69 and the S&P 500 declined 8.94 points to 2,111.85.
In commodities, oil prices got a boost after data showed U.S. crude oil inventories declined more than anticipated. The July crude contract shot up $2.67 to US$60.35 a barrel. Meanwhile, August gold gained $2.60 to US$$1.191.40 an ounce.
In earnings news, Scotiabank (TSX:BNS) posted a two per cent increase in second quarter profit as it benefited from growth in consumer and business loans and results from its wealth management division. Its shares rose 81 cents to $65.38, although the heavily weighted financial sector was down 0.78 per cent per cent.
Scotiabank was the last of Canada's Big Five banks to report its results. Combined, the five, including Royal Bank (TSX:RY), TD Bank (TSX:TD), Bank of Montreal (TSX:BMO) and CIBC (TSX:CM), saw their cumulative net income climb to $8.07 billion, from $7.37 billion in the second quarter of last year. Quarterly revenue for the five totalled $30.45 billion, up from $28.97 billion a year ago.
