TORONTO - The Toronto stock market was sharply lower for a second day Thursday as economic concerns pressured commodity stocks while financials were negative after U.S. President Barack Obama called for tougher regulations on banks.
"We've run a big rally here," said Sid Mokhtari, market technician at CIBC World Markets.
"We shouldn't be panicking by any means. It's more of a backing and filling (by the market), digesting what it's done so far and... looking for a reason why it should further pursue its uptrend."
The S&P/TSX composite index lost 168.6 points to 11,510.7 with the financial sector down 1.5 per cent. TD Bank (TSX:TD) lost $1.51 and $62.35 while Scotiabank (TSX:BNS) fell $1.01 to $44.94.
Obama's proposals will limit the size and complexity of large financial companies so that a bank's collapse wouldn't endanger the overall financial system.
The move could mean sweeping changes for how big financial institutions like Bank of America and JPMorgan Chase & Co. are structured. Bank of America shares fell 5.8 per cent, while JPMorgan lost six per cent.
The focus on banks overshadowed improved profit reports at Xerox Corp., UnitedHealth Group Inc., and Southwest Airlines Co.
Earlier, data from China raised fresh concerns about how much that country can help developed countries pull out of a severe economic slump.
China's economic growth came in at 10.7 per cent in the fourth quarter of 2009 and 8.7 per cent for the entire year. The rapid growth reinforced concerns that Beijing will move to cut lending and tighten monetary policy to put a lid on inflation, which could dampen the global economic rebound.
"That's going to put more pressure on the commodity-related stocks and sectors in Canada," added Mokhtari.
The Canadian dollar was down 0.26 of a cent to 95.25 cents US even as the Bank of Canada delivered a mildly upbeat assessment of the recovery. It said in its latest policy report that Canada's economy is becoming more solidly entrenched, with the private sector beginning to play an increasingly pivotal role in leading the country out of recession.
The base metals sector was the biggest percentage decliner, down 5.3 per cent as March copper eased six cents at US$3.29 a pound. First Quantum Minerals (TSX:FM) lost $4.47 to C$91.23 while Teck Resources (TSX:TCK.B) fell $1.82 to $39.65.
Inmet Mining Corp. (TSX:IMN) said Wednesday that copper production in 2009 was slightly below estimates, while zinc and gold production were both slightly higher than last estimated. The company said copper production fell short of expectations because lower than expected results from its Las Cruces project. Its shares dropped $9.62 to $59.
The February gold contract on the Nymex declined $9.40 to US$1,103.20 an ounce, taking the gold sector down 2.8 per cent. Barrick Gold Corp. (TSX:ABX) faded 98 cents to C$38.72.
Iamgold Corp. (TSX:IMG) shares fell $1.14 to $15.23 after saying it expects to record a non-cash impairment charge of between $85 million and $100 million in the fourth quarter - primarily due to political uncertainty affecting its Camp Caiman project in French Guyana.
The energy sector lost 1.54 per cent as the March crude contract on the Nymex was down $1.77 to US$75.97 a barrel. Suncor Energy (TSX:SU) dropped 70 cents to C$35.91.
Husky Energy Inc. (TSX:HSE) said Wednesday it has managed to shave more than $1 billion off the price tag of its Sunrise oilsands project, part of a joint-venture with British energy giant BP PLC. The Calgary-based company said it now expects Phase 1 of the project to cost $2.5 billion, down from earlier estimates of $3.8 billion to $4 billion. Husky shares lost 51 cents to $28.19.
The TSX Venture Exchange moved 34.59 points lower to 1,556.1.
New York indexes were under added pressure as other data showed a surprising rise in jobless insurance claims last week and deteriorating manufacturing activity in the U.S. Northeast. The Philadelphia Federal Reserve Bank diffusion index fell to 15.2 in January from 22.5 in December. Economists had expected a reading of 17.
The Dow Jones industrial average tumbled 208.7 points to 10,394.5.
The Nasdaq composite index was down 22.62 points to 2,268.63 while the S&P 500 lost 20.25 points to 1,117.8.
In Canadian earnings news, shares in Viterra Inc. (TSX:VT) fell 58 cents to $10 as the major grain handler and fertilizer supplier reported a loss of $900,000 in the fourth quarter. But revenues tumbled 17.6 per cent on a significant decline in commodity prices.
Canadian life sciences company MDS Inc. (TSX:MDS) issued preliminary results Thursday, including a US$19-million loss from its continuing operations and a $58-million loss overall in the fourth quarter. It reports full earnings on Jan. 29 and its shares rose 39 cents to $8.39.
Elsewhere on the corporate front, the Supreme Court of Canada has ruled that the federal government did not conduct an adequate environmental assessment of the Red Chris Mining Project in British Columbia. The high court granted an appeal by MiningWatch Canada that objected to an assessment of the proposed gold and copper mine by Imperial Metals Corp. (TSX:III). But the ruling will not stop the project since the environmental and social advocacy group did not have a direct financial interest in the case. Imperial shares ran up $1.16 to $16.59.