Toronto Star - TSX down more than 1,000 points
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Pessimism puts Dow, TSX below 10,000 for first time in more than 4 years
Oct 06, 2008 10:11 AM
Kristine Owram
THE CANADIAN PRESS
The Toronto stock market plunged Monday amid a global stock-market slump and falling crude oil prices, which slid below $90 a barrel for the first time since early February.
The S&P/TSX composite index fell more than 1000 points to below 10,000, as crude oil was down $2.83 to $91.05 a barrel after earlier going as low as $88.89.
Oil prices have tumbled about 40 per cent since peaking in July, on fears the spreading financial crisis will aggravate a worldwide economic slowdown and cut demand for energy.
The TSX Venture Exchange plunged 70.45 points to 1,229.78 while the Canadian dollar fell 0.95 cent to 91.51 cents US.
In New York, markets were also lower amid deepening bank-sector woes and investor worries that the Bush administration's $700-billion rescue plan for financial institutions won't unfreeze credit markets.
The Dow Jones industrial average fell below 10,000 while the Nasdaq composite index lost 53.9 points to 1,893.49. The S&P 500 was down 30.35 points to 1,068.88.
In economic news, the value of building permits issued by Canadian municipalities tumbled 13.5 per cent in August compared with July. On a year-to-date basis, permits are down 0.7 per cent from 2007.
And in fresh steps to ease the credit crisis, the U.S. Federal Reserve announced it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.
The $700-billion bailout bill signed Friday by President George W. Bush gave the Fed the power to pay interest on those reserves for the first time.
Anxiety remained high in credit markets. The yield on the three-month Treasury bill slipped to 0.4 per cent from 0.5 per cent late Friday.
On the TSX, the energy sector lost 7.3 per cent. Suncor Energy (TSX: SU) was down $3.49 to $32.95 while Canadian Natural Resources (TSX: CNQ) fell $6.78 to $57.14.
The gold sector was up 4 per cent as bullion gained $40 to US$873.20 an ounce on the Nymex. Goldcorp (TSX: G) was up $1.74 to $30.60 while Barrick Gold gained $1.70 to $30.56.
The metals sector fell 4.5 per cent. Sector heavyweight Teck Cominco (TSX: TCK.B) was down $1.43 to $21.65.
Coalcorp Mining Inc. (TSX: CCJ) was down 17 cents to $1.13 after Swiss group Pala Investments Holdings Ltd. more than doubled its stake in the company to 44 per cent with a $52.9-million share purchase.
Jean Coutu Group (TSX: PJC.A) shares were down 32 cents to $7.10 after a summer-quarter net loss of $39.1 million, dragged down by its $73.1-million share in the loss of American drugstore chain Rite Aid Corp. Revenue from Coutu's Canadian operations rose five per cent to $567.5 million.
Overseas, the FTSE 100 index was down 2.9 per cent, while Germany's DAX index fell 5.2 per cent and the French CAC-40 dropped 5.6 per cent after European governments acted to limit the damage from the growing global financial crisis.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a massive bailout for commercial property lender Hypo Real Estate Holding, while France's BNP Paribas agreed to acquire 75 per cent of Fortis's Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
In Asia, the Nikkei 225 closed 4.25 per cent lower.
In U.S. corporate developments, Wells Fargo & Co. said its takeover of Wachovia Corp. will go forward after a state appeals court blocked a lower court ruling that favoured rival bidder Citigroup Inc.
And Eli Lilly & Co. said its board approved an acquisition of ImClone Systems Inc. for more than $6 billion.