Worries over commodity demand takes TSX down
Written on September 9, 2008
The Toronto Stock Exchange’s main index ended lower yesterday after early enthusiasm over the U.S. mortgage bailout plan fizzled as worries over slowing growth weighed on resource and tech shares.
After jumping more than 2 per cent early in the session, the heavyweight energy and materials sectors led the downside as worries resurfaced over how demand for commodities will fare in the face of sluggish global growth.
In the oil patch, Canadian Natural Resources slid 4 per cent to $80, while fertilizer producer Potash Corp. of Saskatchewan Inc. was the biggest net loser, falling $9.85, or 5.7 per cent, to $162.50.
BlackBerry-maker Research In Motion also dragged on the index, falling $4.34 or 3.8 per cent to $108.91, after a report that said the global smartphone market is being hurt by the slowing economy.
"I think the world globally is actually slowing down," said Paul Harris, portfolio manager at Avenue Investment Management.
"You have seen it in China and the rest of Europe, so I think that just puts a damper on the ability for commodities to grow."
The S&P/TSX composite index moved up as much as 350 points at the start of the session, but closed down 181.59 points, or 1.42 per cent, at 12,634.83 with all but two of its 10 main sectors in negative territory.
The financial sector led the upside, buoyed after the U.S payday loans application. government took control of mortgage finance giants Fannie Mae and Freddie Mac on Sunday, the latest in a series of emergency steps to help the struggling U.S. economy.
On Bay Street, all the major banks pushed higher, including National Bank of Canada, which rose 4.4 per cent to $52.51, while Canadian Imperial Bank of Commerce gained 3.4 per cent, or $2.11, to $64.42. The sector closed up 1.5 per cent, while energy and materials lost 3.4 per cent and 4.9 per cent, respectively.
The Canadian dollar moved 0.13 cent lower to 93.92 cents (U.S.).
In New York, the Dow Jones industrials surged 289.78 points to 11,510.74 on the Fannie Mae and Freddie Mac takeovers.
The Nasdaq was up 13.88 points to 2,269.76, while the S&P 500 index rose 25.48 points to 1,267.79.
The October crude contract on the New York Mercantile Exchange closed up 11 cents (U.S.) to $106.34 a barrel.
From the Star’s wire services
Filed in: economics.