Toronto stocks fell as commodity producers slid along with oil and metal prices on speculation a recession will sap demand for raw materials and hurt profits.
Canadian Natural Resources Ltd. and Goldcorp Inc. paced declines among energy and mining shares. Manulife Financial Corp. led insurers lower on speculation that losses will mount as global equities extend their slump. Teck Cominco Ltd. plunged the most in two decades after copper fell to a three-year low.
"It all comes back to the economy," said Ian Nakamoto, director of MacDougall MacDougall and MacTier Inc. in Toronto. "In a global recession, it's a matter of how far commodities will come down."
The S&P/TSX composite index fell 264.80 points, or 2.73 per cent, to a two-week low of 9,424 with all but one of its 10 main sectors in negative territory. The consumer staples group gained 0.2 per cent.
The TSX diversified metals sector slid 10.6 per cent. Teck Cominco Ltd. fell a record 20 per cent, losing $2.20, to $8.75. The company issued a statement minutes before the end of trading to dispel rumours that it's planning to issue more equity – which would be dilutive to current shareholders. Instead, Teck said it's planning asset sales and debt financing to reduce a bridge loan.
Manulife Financial slid 3.4 per cent to $25.75 after Goldman Sachs Group cut its rating on life insurers to "cautious" from "neutral," saying investment losses may force insurers to raise more capital and threaten credit ratings.
Energy stocks declined 4.5 per cent with crude oil closing below $60 (U.S.) a barrel for the first time in nearly two years. The futures contract fell $3.08, or 4.9 per cent, to $59.33 in New York. Canadian Natural dropped 7 per cent to $53.46 (Canadian).
The gold sector fell 3.7 per cent as bullion fell $13.70 (U.S.) to $732.80 an ounce in New York. Goldcorp fell 6.3 per cent to $25.81 (Canadian).
A report from the Bank of Montreal said Canada's resource boom is over and won't return for at least another year, mostly because of the U.S. recession and weak demand.
The Canadian dollar fell 0.30 of a cent to 83.28 cents, trading on international markets because Canadian banks were closed.
On Wall Street, the Dow Jones industrial average declined 176.58 points, or 2 per cent, to 8,693.96. The Nasdaq composite index lost 35.84 to 1,580.90 while the S&P 500 surrendered 20.26 to 898.95.
Stock-market volume was light as bond markets were closed for Remembrance Day in Canada and Veterans Day in the United States.
