A man walks past an old Toronto Stock Exchange sign in Toronto, June 23, 2014.Mark Blinch/Reuters
The Toronto stock market was sharply lower Thursday with the main index giving up the solid gains of the previous session as another dose of negative news from Europe's biggest economy kept concerns elevated about the global economy.
The S&P/TSX composite index declined 146.4 points to 14,520.11 after rising 90 points Wendesday in the wake of reassurance from the U.S. Federal Reserve that it is in no rush to raise interest rates.
The Canadian dollar slipped 0.09 of a cent to of a cent to 89.97 cents US.
U.S. indexes were also lower after also racking up big gains Wednesday amid earnings reports from market heavyweights Alcoa and PepsiCo that beat analyst expectations.
The Dow Jones industrials declined 92.99 points to 16,901.23 following a 275-point surge on Wednesday, the Nasdaq slipped 30.09 points to 4,438.51 and the S&P 500 index dipped 11.69 points to 1,957.20.
Traders digested a third report this week showing a deceleration in the German economy.
The latest data showed that German exports plunged in August as increasing uncertainty over the crisis in Ukraine helped to produce the largest drop in five years. August exports dropped 5.8 per cent over July.
The data came on the heels of other data showing drops in German factory orders and production, leading ING economist Carsten Brzeski to say that "the economy seems to need a small miracle in September to avoid a recession."
Minutes from the latest U.S. Federal Reserve meeting released Wednesday showed that Fed officials are becoming increasingly concerned about weak overseas growth. They were also worried that a U.S. currency that has strengthened considerably over the last six weeks could affect American economic growth adversely.
The minutes showed that Fed officials have moved away from linking any increase in interest rates to any specific period, meaning rates will rise only when measures of the economy's health and inflation signalled the time was right.
The latest batch of negative data pushed oil prices lower after falling $3 over the last two sessions on signs of lower demand and a sharp rise in U.S. inventories last week. The November contract in New York was 65 cents lower to a fresh 18-month low of $86.66 (U.S.) a barrel with the energy sector losing 1.14 per cent.
The base metals component lost 1.3 per cent even as December copper gained three cents to $3.03 a pound.
The gold sector lost 1.5 per cent while December gold jumped $20.60 to $1,226.60 an ounce.
The flood of U.S. third quarter earnings reports started in earnest this week. On Thursday, food and beverage company PepsiCo Inc. reported third-quarter adjusted earnings came in at $1.36 a share, beating estimates of $1.29. PepsiCo posted revenue of $17.22-billion, which beat forecasts of $17.1-billion and its shares rose 1.35 per cent to US$95.21.
Meanwhile, Alcoa also posted a strong report as adjusted earnings came in at 31 cents a share against the 23 cents a share that analysts expected. Revenue of $6.24-billion beat expectations of $5.85-billion and its shares gained almost one per cent to $16.22.
In other corporate news, Canadian Tire Corp. plans to invest an average of $575-million annually over the next three years on business improvements, with money going to new digital technology as well as expansions and upgrades to its store network. The retailer also intends to buy back an additional $400-million of its class A non-voting shares by the end of 2015. Its shares rose $1.29 to a 52-week high of $118.37 (Canadian).