TSX plunges as commodity prices fall

TSX plunges as commodity prices fall


FINANCIAL POSTJULY 6, 2009


Stocks around the world fell Monday largely on skepticism over prospects for an economic recovery any time soon, and the Toronto Stock Exchange fell exceptionally hard as commodity stocks were down in line with resource prices.

The S&P/TSX composite index at midday was down about 305 points, or 2.9 per cent, at 9,980, with energy, materials and financials leading the decline.

On the New York Mercantile Exchange, crude oil was down $2.53 to $64.20 U.S. a barrel. Gold was off $8 to $923 U.S. an ounce. A number of other commodity prices, including natural gas and copper, were also in decline.

The Canadian dollar was up four basis points to 86.12 cents U.S..

Companies will soon be reporting earnings from the second quarter, and there expectations for big profitability declines.

Also, comments over the weekend by U.S. Vice-President Joe Biden indicated the Obama administration "misread the economy" when it predicted unemployment in that country would peak at eight per cent. Last week, it was learned that the jobless rate hit 9.5 per cent in June.

U.S. markets were down as well Monday by midday, but not to the degree as in Canada. The Dow Jones industrial average fell about 30 points, or 0.4 per cent, to 8,230. The Nasdaq composite index was down around 25 points, or 1.3 per cent, to 1,775.

Overseas markets also fell Monday.

On Friday, the S&P/TSX ended the day up 37.19 points or 0.36 per cent, to close at 10,283.1. Markets were closed in the U.S. in lieu of Independence Day.

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