Tumble continues for TSX

The Toronto stock market sustained triple-digit losses for a fourth consecutive session Wednesday as a rising U.S. dollar sent commodity prices and the Canadian dollar sharply lower.

Within minutes of the closing bell, the S&P/TSX composite index had plummeted 221.05 points, or 2%, to 10,832.49.

Investors were also discouraged as hopes for recovery of the American housing sector suffered a setback, further raising doubts about the strength of the U.S. economy.

The TSX was already down about 4% over the last three sessions before this latest slide.

Analysts pointed out that a round of profit taking wasn't surprising, considering the TSX had gained about 50% since the lows of March with hardly a break.

But that gain was based on hopes for a strong economic rebound being in place by late this year and recent economic data, including a report Tuesday that showed an unexpected drop in U.S. consumer confidence, have shaken those hopes.

Among energy stocks, EnCana Corp. declined $2.40 to $59.83 on the TSX.

Nexen Inc. reported that its profit in the third quarter fell to $122 million or 23 cents a share, down 86% from the same time last year, beating analyst estimates by a penny a share.

Nexen's revenue was cut in half to $1.1 billion and its shares were down 46 cents to $23.53.

Mining stocks were also under pressure as the December copper contract on the New York Mercantile Exchange backed off 6.85 cents to $2.93 U.S. a pound and the base metals sector lost ground. Teck Resources dropped $2.64 to $30.42.

Sherritt International Corp. reported that net income fell to $55.9 million or 19 cents per share in the third quarter, down from $133.1 million or 45 cents per share a year earlier because of lower commodity prices "largely due to the impact of relatively weakened global industrial demand on the base metals market."

Revenue fell 18.5% to $389.6 million and its shares stepped back 39 cents to $6.86.

The gold sector was down, as Kinross Gold Inc. faded 87 cents to $19.43.

Groups outside the commodity sectors were also down sharply.

The tech sector declined and Research In Motion Ltd. moved down $2.20 to $65.50 while the industrial sector moved down with Canadian National Railways down 95 cents to $50.95.

In other Canadian earnings news, Maple Leaf Foods Inc. shares ran up 37 cents to $10.83 as the company said quarterly net income came in at $22.5 million or 17 cents a share, compared to a net loss of $12.9 million or 10 cents a share a year ago. Last year's third-quarter had felt the brunt of a Listeria-induced recall at a Maple Leaf plant in Toronto.

Quarterly revenues for the company dipped to $1.29 million from $1.34 million last year.

Methanex Corp. fell to a third-quarter loss of $831,000 or a penny per share as revenue fell due to lower methanol prices. Analysts were expecting a loss of four cents a share and its shares were down 40 cents to $18.59.

The Canadian dollar had flopped 1.24 cents to 92.67 cents U.S.

ON BAYSTREET

All 14 TSX subgroups took a battering, the worst experienced by metals and mining, off 6.6%. Global base metals got bruised 4.5% and materials plummeted 3.7%.

The TSX Venture Exchange tumbled 40.44 points to 1,266.02, while the Nasdaq Canada index lost 33.17 points to 643.21.

ON WALLSTREET

In New York, stocks tumbled Wednesday afternoon, led by the tech-fueled Nasdaq, as a weaker-than-expected new home sales report added to questions about the strength of the economic recovery.

The Dow Jones Industrials slipped 119.48 points, or 1.2%, to 9,762.69. The S&P 500 index slipped 20.78 points to 1,042.63. The Nasdaq composite index fell back 56.48 points to 2,059.61.

The Dow and S&P have fallen for two of the last three sessions, and the Nasdaq for all three, as investors have turned cautious following a 7 1/2-month stock rally.

Since bottoming at a 12-year low in March, the S&P 500 gained 62% through its peak last week.

But since then, it had lost 3.5%, as of Tuesday's close.

Enthusiasm about the largely better-than expected quarterly earnings reports has been tempered recently by concerns about the still-burgeoning economic recovery.

GMAC Financial Services is looking for a third bailout from the Treasury Department, according to a Wall Street Journal report. The lender is seeking between $2.8 billion and $5.6 billion U.S., according to the Journal.

The U.S. owns a 35% stake in GMAC and has given it $13.4 billion U.S. since December 2008.
Financial and technology shares were among the hardest hit stocks Wednesday.

Dow financial components American Express, Bank of America and JPMorgan Chase all declined.

Wells Fargo, Goldman Sachs and Morgan Stanley were among the other big bank shares sliding. On the tech side, Intel, Dell, Apple and Oracle were among the big losers.

Telecom stocks gained, including Qwest Communications which posted a higher-than-expected quarterly profit and lifted its full-year earnings forecast.

Dow stock Verizon Communications rallied 3% after releasing more details about its iPhone challenging Droid smart phone - due for release next week. The phone uses Google's android operating system, has a mini-keyboard and can run several applications at once. It is expected to retail for $199 U.S.

Fellow Dow telecom AT&T also gained.

Economically speaking, new home sales fell to a 402,000-unit annualized rate in September from a revised 417,000-unit annualized rate in August, the Commerce Department reported. Sales were expected to rise to a 440,000-unit annualized rate, according to a consensus of analysts surveyed by Briefing.com.

Elsewhere, orders for manufactured goods meant to last three years or more rose 1% in September, after falling 2.6% in the previous month. The rise was in line with estimates.

Goods excluding transportation rose 0.9% after falling 0.4% in August. Economists thought they would rise 0.7%.

Another report showed that fewer metro areas reported jobless rates above 10% in September than in the previous month.

Thursday's reading on gross domestic product (GDP) growth is the key economic event of the week. GDP is expected to have grown at a 3.2% annualized rate in the third quarter after shrinking at a 0.7% annualized rate in the second quarter.

GDP has declined steadily for four straight quarters, as Americans have contended with the worst recession since the Great Depression.

But the end of the recession doesn't necessarily mean a return to a period of robust growth, particularly amid rising joblessness and still-sluggish consumer spending. Government stimulus programs have played a big role in the recovery, and there are concerns about the strength of the system once that support winds down.

Treasury prices were up, lowering the yields for the benchmark 10-year note to 3.40% from Tuesday's 3.45%. Prices and yields move in opposite directions.

The price of a barrel of oil fell $2.09 to $77.23 U.S.

Gold prices were down $5 at $1,031 U.S. an ounce.