TSX 500-point drop

TSX 500-point drop midday

DAVID FRIEND
Thursday, November 20, 2008
TORONTO — The Toronto stock market revived from a 500-point tumble Thursday morning but was still showing deep triple-digit losses as mining stocks crumbled and the banking industry revealed more bad news.

The S&P/TSX composite index was down 335.61 points to 8,154.95 at midmorning after going as low as 7,947, down 544 points. That was the first time the benchmark index had been below 8,000 since December 2003, and represented a drop of 47 per cent from the market's peak just five months ago at 15,073.

The Canadian dollar accelerated its slide, losing 2.17 cents to 77.66 cents US, after dropping 1.48 cents Wednesday. The currency traded as low as 77.31 cents.

Toronto financial stocks were down 7 per cent after TD Bank disclosed $350-million in quarterly credit trading losses. Its stock lost $3.49 to $46.44, and all the other big Canadian banks were also sharply lower. Royal Bank lost 8 per cent to $37.95 and CIBC fell 9 per cent to $44.

Metal stocks slid 10.3 per cent. Teck Cominco Ltd. was down 23 per cent to $4.00 after it suspended dividends, slashed capital spending plans by $730-million and sold assets to cut debt taken on for the $14-billion (U.S.) takeover of the Fording Canadian Coal Trust.

Kinross Gold Corp. rose 41 cents to $14.35 (Canadian) on word it is paying $250-million (U.S.) to buy the Lobo-Marte gold site in Chile from Teck Cominco and Anglo American PLC.

The TSX energy sector fell 5.3 per cent as crude oil dipped under the $50-a-barrel mark, reviving slightly in later trade to lose $2.94 at $50.68 a barrel on the New York Mercantile Exchange.

On Wall Street, the Dow Jones industrial average declined 145.76 points to 7,852. The Nasdaq composite was off 20.60 at 1,366 and the S&P 500 shed 19.88 to 787.

A jump in weekly U.S. unemployment claims to a 16-year high was the latest piece of depressing economic data. The Labour Department said applications for jobless benefits rose to a seasonally adjusted 542,000 last week, from a downwardly revised 515,000 in the previous week.

Overseas, Japan's main stock index plummeted 6.9 per cent and other markets were also solidly in the red.

Tokyo's benchmark Nikkei 225 average slid 570.18 points to 7,703.04 as data showed exports in October sank 7.7 per cent, the biggest decline since 2001. The rare trade deficit follows confirmation earlier this week that Japan is in recession. Hong Kong's Hang Seng index fell four per cent.

Losses deepened as the day went on in Europe, with the FTSE 100 index down 4.1 per cent in the afternoon in London.

The German DAX fell 4.5 per cent and the Paris CAC-40 lost 4.6 per cent after French automaker PSA Peugeot Citroen said it will cut 2,700 jobs from its 200,000-person workforce in response to skidding European car sales.

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