TORONTO - The Toronto stock market fell more than 200 points Friday as bank stocks sold off amid nationalization worries in the United States and energy stocks retreated along with oil prices.
Falling financials also pushed New York's Dow Jones industrials to depths it hasn't seen in more than six years.
"I think this market is now just panicking again on the financial side," said Andrew Pyle, investment adviser at Scotia McLeod in Peterborough, Ont.
"You look at the bank financial sub-indexes on the S&P, we're talking about a loss of 60 per cent year to date -- not year over year but year to date. In Canada, we're down close to 25 per cent."
Toronto's S&P/TSX composite index trimmed early losses to close down 235.36 points at 7,949.99 as the main index inched towards its most recent low of 7,725 set in November.
The index fell 8.4 per cent on the week led by a 14 per cent slide in financials.
The Dow industrials moved down 100.28 points to 7,365.67 after the White House sought to douse fears that the government would nationalize crippled banks.
The index fell 6.17 per cent on the week.
On Thursday, the Dow broke through its Nov. 20 low of 7,552.29, and closed at its lowest level since Oct. 9, 2002, the depths of the last bear market.
Meanwhile, economic data showed falling prices in Canada and the United States.
Statistics Canada reported the country's annual inflation rate edged lower to 1.1 per cent in January from 1.2 per cent the previous month, driven lower by falling gasoline prices.
And U.S. consumer prices rose by 0.3 per cent last month, the biggest monthly increase since a 0.7 per cent rise in July. But inflation for the 12 months ending in January was zero.
The Canadian dollar gained 0.63 of a cent to 80.04 cents US.
The TSX Venture Exchange declined 9.2 points to 892.9.
New York's Nasdaq composite index moved down 1.59 points to 1,441.23 and the S&P 500 was down 8.89 points to 770.05 as White House press secretary Robert Gibbs said Friday that the administration continues to "strongly believe that a privately held banking system is the correct way to go."
Stocks pulled well off their lows after the comments.
In New York, Bank of America closed down 14 cents at US$3.79 while Citigroup finished 56 cents lower at US$1.95.
Just days before Canadian banks start to issue their latest earnings figures, the TSX financial sector lost five per cent with Royal Bank (TSX:RY) down 86 cents to $27.07 and Manulife Financial (TSX:MFC) lost $1.38 to $13.12.
Kingsway Financial Services Inc. (TSX:KFS) said Friday its loss for the fourth quarter exceeded gloomy estimates released earlier this month, citing underwriting charges at one of its troubled U.S. subsidiaries and impairments to goodwill. Its shares fell 25 cents to $2.90.
Shares in Fairfax Financial Holdings Ltd. (TSX:FFH) were down $19.51 to $352 even as the insurance and investment company reported the biggest annual profit in its 23-year history thanks to "the best returns ever in a brutal investment environment."
The energy sector lost 5.1 per cent as oil prices fell back from Thursday's 14 per cent surge. The March crude contract in New York was down 54 cents to US$38.94 a barrel. Suncor Inc. (TSX:SU) declined $1.80 to C$22.15 in Toronto and Canadian Natural Resources (TSX:CNQ) stepped back $2.10 to $38.26.
The gold sector was the only one providing support, rising 3.1 per cent as nervous investors sent the price of gold over US$1,000 for the first time in almost a year. The April bullion contract on the New York Mercantile Exchange closed up $25.70 to US$1,002.20 an ounce. Goldcorp Inc. (TSX:G) advanced 88 cents to $40.02.
Barrick Gold Corp. (TSX:ABX) shares were up 18 cents to C$46.08 after the company took a US$773-million goodwill writedown while posting a fourth-quarter loss of $468 million. Full-year profit dropped to $790 million from $1.12 billion in 2007. 2009 gold production is projected between 7.2 million and 7.6 million ounces, lower than 2008 production of 7.66 million ounces.
Teck Cominco Ltd. (TSX:TCK.B) shares were down 25 cents to $3.80 after the miner agreed to sell its 50 per cent interest in the Williams and David Bell mines in northern Ontario for US$65 million to an affiliate of Barrick. The sale is part of Teck's plan to sell non-core assets to pay down debt.
Shares in Tim Hortons Inc. (TSX:THI) ran ahead $2.33 to $30.78 even as the coffee shop chain said quarterly profit dropped to $69.1 million from $75.7 million a year earlier. Earnings were reduced by asset impairment charges related to store closures and the company also said it will increase its quarterly dividend by 11 per cent to 10 cents per share.
Shares in Canwest Global Communications (TSX:CGS) plunged 7.5 cents or 17.65 per cent to 35 cents as the Globe and Mail reported that Leonard Asper is scrambling to secure a financial lifeline for the company before the end of the month to prevent his family-run media empire from sliding into bankruptcy protection. It earlier hit an all-time low of 31 cents.
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