Shares swooned in a broad-based selloff in midday trading, with a triple-digit loss in Toronto led by another slide in Research in Motion and a drop in gold shares.
RIM shares continued to tank, recently trading at $12.87, down 99 cents, or 7.1 per cent. That was off its low of $12.17 struck right after market open. With the downdraft Wednesday, the shares have slid nearly 20 per cent since the company unveiled its new Blackberry 10 smart phone.
The TSX composite index tumbled 110 points, or 0.9 per cent, to 12,684.
The economic backdrop for stocks was mixed, with conflicting data released in the U.S.
Initial claims for unemployment insurance last week surged 38,000 to 368,000, reversing a large part of drops recorded earlier in January, suggesting the U.S. labour market remains in a tepid upturn. Meanwhile, the Chicago purchasing managers index climbed to 55.6, its best level in nine months, indicating higher demand in the important U.S. Midwest region.
Many traders are awaiting Friday’s release of January non-farm payrolls and unemployment data for a better reading on the direction of the economy.
The Dow Jones industrial average, after posting a modest advance following the release of the Chicago PMI, trended lower at mid-session, falling 33 points to 13,878. The broadly based S&P 500 fell 4 points to 1,498 while the Nasdaq dropped 2 points to 3,140.
The attention of traders in Toronto continued to focus on the volatility in RIM. The shares had more than doubled from last fall’s lows in the lead up to the release this week of its Blackberry 10, a key product it needs to compete against industry heavyweights Apple and Samsung.
National Bank Financial analyst Kris Thompson advised clients in a note to avoid the stock until it reaches $10 “and we’ve had time to assess the product.” He noted a phone with a qwerty keypad won’t be available until April, which was “very, very disappointing.” He said estimates might come down on the launch delays.
Toronto stocks failed to receive support from commodities. The price of bullion sagged $12.50 (U.S.) to $1,664 an ounce, while oil tumbled 76 cents to $97.18 per barrel.
Among larger gold producers, Goldcorp fell 1.8 per cent and Barrick slid 1.5 per cent. Imperial Oil fell 0.5 per cent, Canadian Natural Resources 2.7 per cent and Encana 1.7 per cent.
Utilities fell, led by pipeline operator TransCanada, off 1.7 per cent.
Banks failed to escape the downdraft, with both the Royal and TD off about 0.5 per cent..
In the U.S., Facebook shares fell 2.8 per cent after the release of a sharp drop in fourth quarter profit at the social networking pioneer.