The Toronto Stock Exchange saw some heavy losses Tuesday as a number of elements came together to shake investors' confidence in the equities market.
At midday, the S&P/TSX composite index was down about 125 points, or 1.1 per cent, to 11,595.
Financials, the most influential sector on Bay Street, was hit as Bank of Montreal reported third quarter earnings that trailed analysts estimates. Not including one-time items, it saw earnings of $1.14 a share. Analysts expected $1.21. Its shares were down 5.52 per cent to $55.80 at midday.
In the U.S., existing-home sales for July came in below already-low expectations from economists. They fell 27.2 per cent to an annualized rate of 3.83 million, missing experts' expectations of about 4.65 million.
Crude oil was down 96 cents to $72.14 U.S. a barrel on the New York Mercantile Exchange, which coincided with losses for TSX energy stocks. Gold was up $6.80 to $1,235.30 U.S. an ounce.
The Canadian dollar was down 39 basis points to 94.64 cents U.S..
On U.S. markets, the Dow Jones industrial average was down about 80 points, or 0.8 per cent, to 10,095 at midday. The Nasdaq composite index fell around 20 points, or 0.9 per cent, to 2,140.
The main stock markets in Europe and Asia were all seeing declines of more than one per cent.
© The Financial Post
Stocks retreat following overseas markets lower; traders brace for weak housing report
Stocks retreated Tuesday as worries continue to mount about the pace of a global recovery.
U.S. traders braced for another disappointing report on the housing market later in the day. Overseas markets tumbled.
The Dow Jones industrial average fell 102 points in early morning trading. Broader indexes also fell more than 1 percent. Investors jumped back into the Treasury bond market as they shunned stocks for the safety of government debt. That sent interest rates lower.
Stocks extended a slide that continued Monday when investors focused more on signs that economic growth is slowing than strength in individual companies and a fresh round of corporate dealmaking. Economic reports in recent weeks have shown the pace of the recovery is waning, which has sparked concerns the economy could fall back into recession.
Japanese stocks led the way lower Tuesday, falling more than 1 percent as the yen hit a fresh 15-year high against the dollar. Japan's economy relies heavily on exports, so a stronger yen hurts profitability. European markets were also sharply lower.
The National Association of Realtors is expected to report that sales of previously occupied homes plunged in July. Sales totaled a seasonal adjusted annual rate of 5.37 million houses in June.
Home sales have tumbled since a home buyer tax credit expired at the end of April, despite mortgage rates falling to record lows. Banks have also been selective in giving loans, which could be freezing out many potential buyers.
Home buyers also remain skittish about the value of homes and job concerns remain pervasive adding to the caution. The unemployment rate remains at 9.5 percent and weekly claims for unemployment benefits have consistently risen in recent weeks.
In early morning trading, the Dow Jones industrial average fell 101.72, or 1 percent, to 10,072.69. The Standard & Poor's 500 index fell 12.50, or 1.2 percent, to 1,054.86, while Nasdaq composite index fell 29.65, or 1.4 percent, to 1,782.68.
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