The Toronto stock market tumbled more than 150 points Tuesday amid sliding commodity prices as U.S. earnings disappointments and a fresh round of worry centred on Europe's debt crisis reminded investors about flagging global growth.
The S&P/TSX composite index closed off the worst levels of the session, coming back from a 262-point slide to fall 177.70 points to 12,225.84 with losses spread across all sectors, while the TSX Venture Exchange lost 18.91 points to 1,289.5.
U.S. markets were sharply lower in the wake of disappointments from Dow heavyweights DuPont and 3M. The Dow industrials plunged 243.36 points to 13,102.53, the Nasdaq was down 26.5 points to 2,990.46, while the S&P 500 index fell 20.70 points to 1,413.11.
The Canadian dollar pared early losses as the Bank of Canada said it was keeping its key rate unchanged at 1% while warning that it will raise rates at some point.
The currency dipped US0.01¢ to US100.74¢. It had earlier traded as low as US100.23¢, its lowest level since early August, amid speculation that the central bank's statement would take a less hawkish stance on raising rates.
Instead the bank maintained the key message of previous statements - that there will need to be modest rate hikes - with the slight modification that added "over time" to the equation.
Meanwhile, chemical maker DuPont reported net income of US$10 million Tuesday, or a penny per share. Excluding onetime items, DuPont earned 44¢ per share, compared with 69¢ per share for last year's third quarter. The results fell short of the average estimate of 46¢ per share, and DuPont's stock slid 9% to US$45.25.
And conglomerate 3M said its third-quarter profit edged up to $1.16 billion, or $1.65 a share, which met estimates. Sales dipped 0.4% to $7.5 billion, which missed expectations of $7.63 billion. 3M also cut its 2012 profit estimate to reflect "current economic realities." The variety of 3M's businesses and its worldwide footprint make it an economic bellwether and its shares fell $3.80 to US$88.73.
Some of the disappointing revenue is due to weakness in foreign markets. Multinationals are having a hard time selling to Europe, which is struggling under debt.
"The recession in Europe is very real," said Bernard Schoenfeld, senior investment strategist for Bank of New York Mellon Wealth Management in New York.
"It's not going to disappear very quickly, and it will certainly negatively affect earnings of exporters in the United States."
Expectations for this earnings season were already muted with analysts expecting the first year-over-year drop since 2009.
