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TMX Broadcast Centre manager Kris Backus walks in front of the centre's display board in Toronto.

Frank Gunn/Frank Gunn/THE CANADIAN PRESS

The Toronto stock market racked up steep, triple-digit losses for a second session Wednesday after the U.S. Federal Reserve indicated further economic stimulus isn't in the cards.

The S&P/TSX composite index dropped 172.31 points to 12,151.3 on top of a 184-point plunge Tuesday, led by sliding resource stocks as prices for oil, copper and gold registered steep declines.

The TSX Venture Exchange fell 52.17 points to 1,493.46.

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The commodity-sensitive Canadian dollar fell 0.65 of a cent to 100.32 cents US.

U.S. markets were also deep in the red as Fed policy-makers said they were worried that recent strong gains in hiring could fizzle if U.S. economic growth doesn't pick up.

However, the minutes of the Fed's March 13 meeting showed that only a couple of members wanted to take further steps to boost the economy.

The Dow Jones industrials fell 161.51 points to 13,038.04.

The Nasdaq composite index fell 52.6 points to 3,060.97 while the S&P 500 index dropped 17.17 points to 1,396.21.

There have been some hopes recently that the Fed would authorize another bond-buying program, known as quantitative easing. Much of the money that's been pumped in over the past few years has ended up in financial markets, notably boosting stocks and commodities.

"There was an initial euphoria a week or so ago when (another round of stimulus) was on the table, which meant more liquidity into the markets," said Chris Kuflik, wealth adviser at ScotiaMcLeod in Montreal.

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"Markets are taking away the gains that were based on hope of more liquidity coming in now that it seems the U.S. doesn't seem to want to inject more liquidity."

Kuflik added that what is more important is the upcoming slew of first-quarter corporate earnings, which start coming out in the U.S. next week "because that is what will drive stock prices."

Markets seemed unaffected by a report showing that the U.S. private sector created 209,000 jobs in March. The data from payrolls processor Automatic Data Processing Inc. was close to analysts' expectations.

The report came out two days before the release of the U.S. non-farm payrolls report for March. Economists expect the data to show the economy cranked out a total of 210,000 jobs last month.

Meanwhile, the Institute for Supply Management's non-manufacturing purchasing managers index showed the service sector expanding, but at a slower pace. It came in at 56, lower than the 56.6 reading that economists expected.

The disappointment with the Fed minutes comes at a time when most stock markets have racked up steady advances through the first quarter as a string of U.S. reports, particularly employment data, have reinforced the view that the recovery continues at a slow but steady pace. The U.S. economy has added at least 200,000 jobs in the last three months while manufacturing data, such as the ISM's index, have beat expectations.

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Commodity prices registered sharp declines with the May crude contact on the New York Mercantile Exchange down $2.47 to US$101.54 a barrel, pushing the energy sector down 2.5 per cent.

Prices were also pressured by a report showing a larger than expected increase in U.S. crude supplies, which suggested demand may remain weak.

The Energy Information Administration reported an increase in crude stockpiles by nine million barrels in the week ended March 30. That contrasts with expectations of an increase by 1.9 million barrels

Cenovus Energy (TSX:CVE) shed 73 cents to C$34.75 while Canadian Natural Resources (TSX:CNQ) lost 54 cents to $32.62.

The base metals component fell 3.3 per cent as the May copper contract lost 11 cents to US$3.81 a pound. Teck Resources (TSX:TCK.B) declined 91 cents to C$34.99 and First Quantum Minerals (TSX:FM) dropped $1.03 to $18.07.

The industrials sector lost about one per cent. Sliding commodities and resource stocks sent Finning International (TSX:FTT), the biggest dealer of Caterpillar heavy mining equipment, down 29 cents to $27.20.

The gold sector lost 2.8 per cent as bullion prices fell heavily, down $53.60 to US$1,618.40 an ounce. Goldcorp Inc. (TSX:G) was $1.45 lower to C$41.65 and Barrick Gold Corp. (TSX:ABX) faded 67 cents to $41.86.

Financials also contributed to TSX weakness with Sun Life Financial (TSX:SLF) down 25 cents to $23.42 while Scotiabank (TSX:BNS) gave back 42 cents to $55.03.

European bourses were negative as London's FTSE 100 index gave back 2.35 per cent, Frankfurt's DAX fell 2.86 per cent and the Paris CAC 40 dropped 2.7 per cent.

In corporate news, Rona Inc. (TSX:RON) has denied that the company is up for sale after stock in the home renovation retailer jumped more than 12 per cent in heavy trading Tuesday on the Toronto Stock Exchange.

The Quebec-based retailer issued the denial in response to movement in its stock after Robert Hull, chief financial officer of Lowe's Companies Inc., said his U.S.-based rival might be interested if Rona put itself up for sale. On Wednesday, Rona shares lost 42 cents, or four per cent, to $10.06.

Yahoo is laying off 2,000 employees as part of the latest plan to turn around the beleaguered Internet company. The cuts represent about 14 per cent of the 14,100 workers employed by Yahoo. Its shares slipped a dime to $15.08.

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