TORONTO - Another wave of bad economic sentiment wore through the Toronto stock market Monday as oil prices fell and Japanese auto giant Toyota Motor Corp. projected its first-ever full-year operating loss.
Toronto's S&P/TSX composite index fell 302.47 points to 8,249.53, and the Canadian dollar moved higher at 82.03 cents US, up 0.26 of a cent.
The energy sector lost six per cent as the light, sweet crude contract fell $2.45 to US$39.91 a barrel on the New York Mercantile Exchange.
Observers suggest slowing oil demand in China and Japan will cause the Organization of Petroleum Exporting Countries to further cut production. Last week, OPEC cut production to 2.2 million barrels a day.
Toyota provided more evidence of companies' struggles amid a sharp drop around the world in demand for products of all kinds.
The Japanes automaker slashed its earnings forecast for a second time, warning that it now expects to report its first-ever operating loss for the fiscal year through March.
While Toyota doesn't directly trade on the Canadian stock market, the company's weakness is worrying Canadian investors already concerned about the fate of the so-called Detroit Three carmakers -- GM, Ford and Chrysler -- and the long-term health of the global auto sector.
Auto jobs are key to the success of Canada's manufacturing economy centred in Ontario and Quebec.
Toyota's latest comment also adds further pressure to Canadian companies like autoparts maker Magna International (TSX:MG.A) which supplies manufacturers around the globe. Magna stock was nearly four per cent lower, down $2.73 to $33.51.
Investors were grappling with a variety of discouraging data that stretched even further than Toyota and oil prices, suggested Paul Taylor, chief investment officer of BMO Harris Private Banking.
"It's more concern about how long this economic downturn is going to be," Taylor said "It's not anything specific, it's more just general malaise."
On the TSX, diversified metals stocks were the main decliner, dropping 7.7 per cent, as Teck Cominco Ltd. (TSX:TCK.B) fell 66 cents to $5.15.
The gold sector was down 4.4 per cent as the February bullion contract rose $9.80 to $847.20.
Also facing Canadian investors were the lowest consumer confidence levels in more than a quarter century. The Conference Board of Canada says confidence fell for its third consecutive month and dropped the index 3.3 points to 67.7, lower than during the 1991 recession and the lowest since 1982.
On Wall Street, the Dow Jones industrials lost 59.42 points to 8,519.69. The Nasdaq composite index fell 31.97 points to 1,532.35 and the S&P 500 slid 16.25 points to 871.63.
Toyota's bleak announcement underscores the challenges that remain for car companies, whose growth has been halted by the weak economy. Toyota's American rivals, General Motors Corp. (NYSE:GM) and Chrysler LLC received a $17.4-billion lifeline from the U.S. government on Friday, in a move to stave off a major bankruptcy.
Information technology stocks were 2.8 per cent lower as Research in Motion (TSX:RIM) dukes it out with Certicom Corp. (TSX:CIC) over a takeover bid which Certicom is trying to block.
RIM shares lost $3.29 to C$50.03, while Certicom rose eight cents to $1.80 -- well above RIM's offer price of $1.50 per share.
AbitibiBowater Inc. (TSX:ABH) shares gained 13 cents, or 24.5 per cent, to 66 cents after the company said it would receive $197.5 million, less expenses, for sale of its interest in hydro-electric generating assets in Ontario. The unidentified buyer would assume $250 million in term debt held by ACH Limited Partnership, which is owned 75 per cent by AbitibiBowater.
Fronteer Development Group (TSX:FRG) says it intends to buy the common shares of Aurora Energy Resources Inc. (TSX:AXU) that it doesn't already own, giving Aurora shareholders 0.83 of a Fronteer share for each Aurora common share they own. Fronteer shares dropped 94 cents to $2.19 while Aurora shares gained 59 cents to $1.56.
The TSX Venture Exchange was down 7.02 points to 692.02.
U.S. drugstore operator Walgreen Co. says its profit fell 10 per cent in its fiscal first quarter, short of Wall Street expectations, due to the costs of opening more than 200 new stores. The company said it will slow down its expansion because of the recession.
