TORONTO - The Toronto stock market's decline deepened Thursday as lackluster corporate losses and cautious predictions for next year kept the weakening economy in the spotlight.
The S&P/TSX composite index declined 350.38 points to 9,536.82 near midday after closing down 229 points on Wednesday.
The Canadian dollar was at 84.93 cents US, down 0.69 of a cent after losing 1.25 cents in the previous session.
The energy sector was down 6.2 per cent. Crude oil receded $4.15 to US$61.15 on the Nymex as renewed concerns about the severity of a global economic slowdown triggered an exodus of investor capital from stocks and commodities.
But TSX gold stocks dropped 2.9 per cent, even as the December bullion contract on the New York Mercantile Exchange remained unchanged at US$742.40 after heading about $16 higher earlier in the session.
Iamgold Corp. (TSX:IMG) reported a third-quarter profit of US$18.8 million or six cents per share, down slightly from a year-earlier US$19.5 million or seven cents per share. Iamgold's 2008 production target remains unchanged at 950,000 ounces at a revised cash cost of $480-$490 per ounce. Its shares were down a penny to $4.33.
Financials lost 1.3 per cent as Manulife Financial Corp. (TSX:MFC) arranged a $3-billion loan line from the six biggest Canadian banks to bolster its capital, while reporting its third-quarter profit was cut by half to $510 million, eroded by sliding stock markets and a hit from credit losses. Manulife stock rose 30 cents to $26.10.
Investment dealer Canaccord Capital Inc. (TSX:CCI) suspended its dividend while reporting a summer-quarter loss of $5.4 million, down from year-ago earnings of $15.3 million. Revenue was down 30 per cent at $110.8 million. Canaccord shares fell 10.5 per cent, dropping 69 cents to $5.66.
GMP Capital Trust (TSX:GMP.UN) was up 17 cents to $5.09 despite disclosing it is cutting distributions by more than half, eliminating 37 employees and trimming executive salaries by 10 per cent after a 43 per cent slide in third-quarter revenue to $74.8 million.
On Wall Street, the Dow Jones industrial average slipped 186.85 points to 8,952.42. The Nasdaq composite index dropped 36.03 points to 1,645.61 while the S&P 500 moved down 21.85 to 930.92.
The moves come amid weak U.S. retail sales and employment data, adding to anxiety about a deep American recession spreading worldwide.
The U.S. Labor Department said new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000, but jobless claims above 400,000 are considered recessionary levels, and have run above that figure for 16 weeks.
A warning by Cisco Systems Inc. aggravated investor worries. The world's largest maker of computer networking equipment said late Wednesday that orders fell off sharply last month, indicating that the weak economy and tight credit markets are hurting many companies.
And News Corp., the global media empire run by Rupert Murdoch, reported a 30 per cent decline in quarterly profit.
American retailers are reporting what are expected to be the weakest October sales in decades as an intensifying financial meltdown and mounting layoffs leave Americans too scared to shop.
Better-than-expected sales at Wal-Mart Stores Inc. provided one of the few bright spots, as the world's largest retailer benefited from a consumer focus on basics. But most other U.S. stores, particularly mall-based apparel merchandisers, reported steep sales drops.
In Canadian corporate earnings, Canadian Tire Corp. (TSX:CTC.A) rang up a 6.3 per cent increase in summer-quarter profit to $108.6 million as its retail sales grew 7.3 per cent. Its stock lost four cents to $45.26.
Biovail Corp. (TSX:BVF) reported third-quarter net income of $48.4 million, down 27 per cent from $65.9 million a year earlier, as revenue declined to $181.1 million from $188.9 million. Shares were up seven cents to $10.76.
AbitibiBowater Inc. (TSX:ABH) reported a third-quarter net loss of US$302 million, $5.23 per share, on sales of $1.7 billion, sending its shares down 60 cents to $1.81.
Yellow Pages Income Fund (TSX:YLO.UN), which owns telecom directory and other businesses, reports its net profits for the third quarter rose to $146 million or 28 cents a unit from $122 million or 23 cents a unit last year. Revenues jumped to $426.1 million from $416.5 million. Shares lost 11 cents to $8.02.
Air Canada (TSX:AC.A) has reported a 3.9 per cent decline in October traffic compared with a year ago while Air Canada and the Jazz regional operator (TSX:JAZ.UN) posted a record consolidated load factor for the seasonally slack month, with 80.2 per cent of seats filled as system-wide capacity was cut by 5.9 per cent. Air Canada shares were down 10 cents to $5.20 while Jazz unis ros 22 cents to $4.63.
Toyota Motor Corp., which had been riding high on the success of its Prius hybrid and Camry sedan, says it expects its earnings for this fiscal year will be less than a third of last year's profit and its lowest annual total in eight years.
The Bank of England slashed its benchmark interest rate by 1.5 percentage points to three per cent. The size of the cut jolted financial markets which had expected at most a one-point reduction.
The European Central Bank quickly followed by cutting its policy rate by half a point, and the Swiss National Bank also cut its key rate by half a point.
