Roger Biduk - Bay Street Drops to Lowest Level in Four Years

Roger Biduk writes:

The Toronto stock market closed at its worst level in almost four years Friday thanks to big selloffs in energy and metals stocks.
The S&P/TSX composite index plunged 535.02 points to 9,065.16 for a loss of 1,738 points or 16 per cent this week.
But that was far better than the 750-point plunge registered during the afternoon as the TSX joined a series of big declines on stock markets around the world, as investors bailed out on continued fears over frozen credit and economic instability.
The TSX Venture Exchange fell 71.47 points to 975.81.

Financial stocks also moved lower even as the government announced help for Canada's big banks.

Finance Minister Jim Flaherty announced that Canada Mortgage and Housing Corp. is buying up to $25 billion in mortgage-backed securities from the country's banks in an effort to maintain the availability of credit.
Investors initially reacted positively to the news, but the sector ended up losing 3.3 per cent as Royal Bank (TSX:RY) lost 40 cents to $41 and Scotiabank (TSX:BNS) fell $1.33 to $39.98.
Canada's big banks also announced they are passing on more rate cuts to consumers and companies in the wake of the Flaherty announcement.
TD Canada Trust and CIBC (TSX:CM) said it will lower its prime lending rate by 15 basis points to 4.35 per cent, effective next Tuesday. The Bank of Nova Scotia and the Royal Bank are cutting their prime rate by a quarter-point to 4.25 per cent.
The banks had come under fire earlier this week after they passed on only half of the50-basis-point cut in the Bank of Canada's overnight rate, which was part of a co-ordinated effort by major central banks to ease credit markets.

The TSX energy sector dropped more than eight per cent as the November crude contract on the New York Mercantile Exchange pulled back $8.89 to US$77.70 a barrel as investors believe rapidly slowing economic conditions will curb demand.
EnCana Corp. (TSX:ECA) retreated $6.39 or 12.8 per cent to $43.50 and Suncor Energy (TSX:SU) fell $1.67 to $26.09.

Meanwhile, worsening economic conditions and retreating oil prices pushed the Canadian dollar down 2.59 cents to 84.69 cents US, after the loonie briefly took a five cent dive against the greenback-its biggest drop ever. The loonie lost 7.77 cents or 8.4 per cent this past week.

On the TSX, there didn't seem to be any safe haven with even the gold sector down 11 per cent as the December bullion contract on the Nymex fell $27.50 to US$859. Goldcorp Inc. (TSX:G) gave back $4.81 or 14 per cent to $29.69.

The base metals sector moved back over six per cent with Teck Cominco Ltd. (TSX:TCK.B) down $2.74 or 14.3 per cent to $16.36.

On the TSX, declines beat advances 1,411 to 317 with 167 unchanged as 712.8 million shares traded worth $9.5 billion.

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