Stocks are ending a wild day mostly lower as indexes recover much of an early plunge.
Investors dumped risky assets Wednesday in heavy trading and parked their money in investments seen as relatively safe, such as U.S. government bonds.
The S&P/TSX composite index tumbled 166.8 points to 13,869.88 as the TSX fell further into correction territory, losing 12 per cent since the record highs of last month and close to shedding all its gains for the year.
The Dow Jones industrial average plummeted as much as 460 points in afternoon trading, then clawed back much of the ground it lost. It ended down 173 points, or 1.1 per cent, at 16,141.
The S&P 500 fell 15 points, or 0.8 per cent, to 1,862. The Nasdaq fell 11 points, or 0.3 per cent, to 4,215.
A late-afternoon recovery erased much of the losses. The S&P 500 and the Nasdaq are now slightly higher for the year.
Bond prices soared. The yield on the 10-year Treasury note fell to 2.15 per cent.
The Canadian dollar gained 0.38 of a cent to 88.83 cents (U.S.).
Worries about the economy deepened as U.S. retail sales for September came in weaker than expected, falling 0.3 per cent amid broad weakness against the 0.1 per cent decline that economists had expected.
"Overall, this is a setback for consumer spending and suggests downside risk for Q3 growth," said BMO Capital Markets senior economist Jennifer lee.
Traders were unmoved by data in the Federal Reserve's latest economic survey showing that most regions across the U.S. saw modest or moderate economic growth in September.
Markets have headed steadily downward since last month but the sell-off gained momentum last week as a string of disappointing German economic data raised concerns that Europe's biggest economy could be headed back into recession. Also, the International Monetary Fund again revised downward its global growth projections.
Growth concerns have particularly hammered oil prices, which have fallen to 2 1/2 year lows after the International Energy Agency slashed its oil-demand growth forecast for this year by more than a fifth. On Wednesday, November crude in New York was six cents lower at $81.78 (U.S.) a barrel.
The TSX energy sector has been the major weight on the Toronto market, plunging 19 per cent over the last month. It was down another 0.57 per cent Wednesday.
The sell-off on markets is also taking place amid a number of other concerns, including the end this month of the Federal Reserve's latest round of quantitative easing, the program of massive bond purchases that has kept long-term rates low and fuelled a rally on stock markets over the last few years.
The state of the European economy has also depressed the euro and pushed the U.S. dollar higher. The higher greenback has helped depress commodity prices and raised concerns that it could weigh on the earnings of American multinationals.
New York indexes have yet to close in correction territory. Still, the Dow has lost almost seven per cent since Sept. 19 while the S&P 500 has fallen just eight per cent. Both indexes had been at or close to record levels and a correction has been widely expected since there hadn't been a retracement in three years.
And now that the retracement is gaining momentum, analysts caution that the sell-off likely has a way to go.
"Peak to trough, we can easily correct anywhere from eight to 13 per cent without really altering the long-term picture," said Sid Mokhtari, a market technician at CIBC World Markets.
"We're getting closer to a good bottom. We should put things into perspective and not necessarily fear what is coming at us at this point."
The financials group was also a major weight, down 2.5 per cent amid earnings disappointments from Bank of America and U.S. lender Keycorp.
The TSX also felt added pressure from the base metals group, down another 3.5 per cent for a loss of more than 20 per cent over the last month as December copper gave back eight cents to $3.01 a pound.
Rail stocks continued to fall alongside miners, taking the industrial group down per cent.
The gold sector was flat as bullion prices erased early losses as the flight to safety pushed December bullion up $10.50 to $1,244.8 an ounce.