Bay and wall street `spooked'

TSX energy sector takes hit, tech stocks retreat in New York TheStar.com - Business - TSX energy sector takes hit, tech stocks retreat in New York

January 05, 2008

Growing worries over the prospect of a recession in the United States weighed heavily on the Toronto Stock Exchange's main index yesterday, while resource issues retreated amid softer commodity prices.

The index tumbled immediately after the opening bell following data that showed weak U.S. job growth in December and rising unemployment.

The S&P/TSX composite index closed down 199.62 points, or 1.43 per cent, at 13,778.58 – its steepest decline in nearly three weeks. All of the TSX's 10 main groups finished lower.

The energy sector pulled back 1.4. per cent as the February crude contract on the New York Mercantile Exchange drifted $1.27 (U.S.) lower to $97.91 a barrel. Sector leader EnCana Corp. gave back 69 cents (Canadian) to $69.87 and Suncor Energy moved down $2.17 to $109.67.

Ivanhoe Energy Inc. shares dropped five cents to $1.50 as it announced it plans to start the second phase of gas exploration at the Sichuan project in China through its subsidiary Sunwing Zitong Energy Ltd.

The financial group moved down 1.2 per cent with CIBC down $2.05 to $68 while Scotiabank dropped $1 to $48.

The tech sector lost 2.5 per cent after an analyst at JPMorgan downgraded chip giant Intel Corp., citing a dip in orders from computer makers and high inventories. Research In Motion Ltd. retreated $8.20 to $103.46. The company makes almost two-thirds of its sales in the U.S. Celestica slipped 12 cents to $5.50.

wall street `spooked'

U.S. stocks had the steepest weekly loss since July.

Apple Inc. and Google Inc., among the best-performing technology stocks last year, tumbled as the Nasdaq composite index declined 98.03 points to 2,504.65.

Apple slumped $14.88 (U.S.), or 7.6 per cent, to $180.05, the biggest drop since April 2005, while Google fell 4.1 per cent to $657.

Intel declined $2, or 8.1 per cent, to $22.67, the most since January 2006.

"The market is spooking itself," said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis. "It's natural for people to get nervous when everyone is getting nervous."

The Nasdaq's 5.6 per cent decline so far this year is the worst start since the electronic market opened in 1971.

Bed Bath & Beyond Inc., the largest U.S. home-furnishings retailer, fell $1.21, or 4.4 per cent, to $26.19 after its forecast in its quarterly earnings trailed estimates.

Alcoa, the world's second-largest aluminum company, fell $1.32 to $34.87. Home Depot, the largest home-improvement retailer, fell 86 cents to $24.96, an almost five-year low. Hewlett-Packard, the No. 1 personal computer maker, slipped $2.78 to $46.87.

SLM Corp., also known as Sallie Mae, declined $2.49, or 13 per cent, to $16.67 for the steepest drop in the S&P 500. The biggest U.S. educational lender said it will be more selective in pursuing loan originations and will cut services to borrowers.

The Dow Jones industrial average lost 256.54 points to 12,800.18 while the S&P 500 index moved down 35.53 to 1,411.63.

metals, auto-parts slip

On the TSX, the base-metals sector was off 2.17 per cent with HudBay Minerals down 70 cents (Canadian) to $18.60. Teck Cominco Ltd. retreated $1.02 to $35.

The February bullion contract was down $3.40 (U.S.) at $865.70 an ounce, taking the TSX gold sector down 0.55 per cent as Barrick Gold declined 47 cents (Canadian) to $47.96 after hitting an all-time high Thursday.

Shares of car-parts manufacturers plunged as well. Linamar Corp. fell $1.21, or 6.4 per cent, to $17.74. Martinrea Inc. declined 65 cents to $11.50. Magna International Inc. slipped 56 cents to $74.50, taking a three-day drop to 7.1 per cent.

Shawcor lands contract

ShawCor Ltd., a Toronto-based energy and industrial services company, said it has won a contract worth more than $40 million to provide pipeline coating services for EnCana Corp.'s Deep Panuke natural gas project off the coast of Nova Scotia.

That helped lift its shares 70 cents to $35.80, a gain of nearly 2 per cent.

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From the Star's wire services