Despite aggressive interest rate cuts from the Bank of Canada before stock markets opened, Canadian investors were in no mood to bet on a rebound in the economic prospects for the country or a return to health for the country's struggling banking sector.
The S&P/TSX composite index fell 33 points, or 0.2 per cent, to 13,511 in early trading on Tuesday. The usual suspects, banks, were the biggest drags. Bank of Montreal shares fell 3.9 per cent, taking them to a new four-and-a-half year low. National Bank of Canada shares fell 2.6 per cent. Bank of Nova Scotia fell 1.5 per cent.
In the United States, the Dow Jones industrial average fell 98 points, or 0.8 per cent, to 12,161. The broader S&P 500 fell to 1322, down 9 points or 0.7 per cent. The usual suspects were plumbing new depths there as well. Citigroup Inc. fell 3.5 per cent after one of world's top sovereign wealth funds - Dubai International Capital - said that the bank will need lots more cash to offset losses from the U.S. subprime mortgage market.
As well, American International Group Inc. fell 2 per cent and Bank of America Corp. fell 1.7 per cent. Intel Corp., the technology bellwether stock, fell 1.5 per cent after the chip maker released a dour forecast relating to its profit margins.