TORONTO: Toronto's main stock market index lost all of the previous day's big gains and more on Wednesday as a grim outlook from the US Federal Reserve, euro-zone bailout doubts, and an earnings miss by US tech darling Apple prompted investors to cut risk.
The Fed's coast-to-coast survey said that while the US economy kept growing slightly in September, its prospects appeared to be dimming.
Its release in the afternoon drove down commodity prices that were already under pressure from a Moody's downgrade of Spain's sovereign credit rating earlier in the day, which further complicated the euro zone debt crisis.
Oil and copper prices dropped on Wednesday and gold's safe-haven status didn't prevent it being hit. Among the heaviest laggards on the TSX were gold miners, which skidded 5.5 percent. Barrick Gold lost 4.4 percent to C$45.68 and Goldcorp was down 5.1 percent at C$45.34.
"In the short term, gold is a risky asset just like any other...when traders are nervous, they start selling everything," said Aaron Fennell, futures specialist at ScotiaMcLeod.
Rounding out the top three most heavily weighted decliners, gold miner Agnico Eagle sank 18.3 percent to C$47.35 after announcing it is indefinitely suspending mining operations at its Goldex mine in Quebec due to water inflow and ground instability.
Also knocking market confidence was a mixed bag of US earnings reports. Apple Inc's results late on Tuesday missed estimates for the first time in years as it sold far fewer iPhones than expected, sending its shares down more than 5 percent on Wednesday.
The Toronto Stock Exchange's S&P/TSX composite index ended down 203.61 points, or 1.69 percent, at 11,849.50. Nine of the 10 sectors were weaker, while health care gained 0.4 percent.
The TSX rallied 1.1 percent on Tuesday after a story in Britain's Guardian newspaper said that France and Germany had reached a deal to expand the euro zone's rescue fund to more than 2 trillion euros. On Wednesday, however, French President Nicolas Sarkozy said talks with Germany had stalled.
In Greece, center of the debt storm, black-clad demonstrators hurled stones and fire bombs at police in front of parliament as tens of thousands rallied during a nationwide general strike to coincide with a parliamentary vote on painful new austerity measures.
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