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TSX closes 248 points lower as oil slides; dollar below 76 cents US

TORONTO — Canada’s biggest stock market tumbled more than 200 points Tuesday, while the loonie took a beating amid falling oil prices and anticipation over a possible U.S. Federal Reserve interest rate hike.

TORONTO — Canada’s biggest stock market tumbled more than 200 points Tuesday, while the loonie took a beating amid falling oil prices and anticipation over a possible U.S. Federal Reserve interest rate hike.

In Toronto, the S&P/TSX composite index plunged 248.04 points, or 1.7 per cent, to 14,349.10, as metal, energy and gold stocks led declines.

On Wall Street, the Dow Jones industrial average lost 258.32 points at 18,066.75, while the Nasdaq shed 56.63 points to 5,155.26. The S&P 500 fell 32.02 points to 2,127.02.

North American stock markets have been see-sawing back and forth for the past three sessions as investors try to gauge whether the Fed will make a move on monetary policy at a two-day meeting starting next Tuesday.

Indices experienced a steep drop on Friday, with the TSX shedding nearly 300 points, while the Dow pulled back almost 400 points. Some of those losses were recouped by a rally on Monday.

The increased volatility has come as a shock to some who have been lulled over the last two months by a quiet trading period over the summer.

“It’s a mindset shift. It coincides with traders and portfolio managers being at their desk and engaged again after a relatively complacent summer,” said Paul Vaillancourt, an executive vice-president of private wealth at Fiera Capital in Calgary.

“Then all of a sudden, what were risk-on days have become risk-off days. We’re basically seeing that right across the globe.”

Much of the pressure came as the price of oil retracted amid a negative report by the International Energy Agency.

The October contract for crude oil pulled back $1.39 to US$44.90 a barrel, dragging down the Canadian dollar by 0.70 of a cent to 75.93 cents US.

The IEA, which represents 29 oil-producing countries, is predicting slower growth in demand for oil because of a more pronounced economic slowdown during the third quarter of the year, among other factors. The price of oil has plunged over the last two years as an enormous supply glut built up while growth in demand slowed.

Investors have been worried about a possible slowdown in economic growth, with those fears being a big reason why stocks tumbled last January and early February.

Meanwhile, commodities were negative across the board, with the December contract for gold falling $1.90 to US$1,323.70 an ounce.

October natural gas contracts were down a penny at US$2.91 per mmBtu and December copper prices were unchanged at US$2.10 a pound.

— With a file from The Associated Press