Markets tumble before weekend
Stock markets tumbled Friday as the latest batch of earnings reports and high oil prices raised concerns about U.S. economic growth, while the dollar surged to a fresh decades-old highs after data showed higher-than-expected core inflation in September.
On top of that, in the back of investors’ minds was the recollection that it was the 20th anniversary of the 1987 stock market crash, when the Toronto stock market dropped 11 per cent and the Dow Jones industrials nearly 23 per cent on concerns about interest rates and slowing economic growth.
On Friday, Toronto’s S&P/TSX composite index tumbled 330.37 points or 2.23 per cent to 14,001.66, for a loss of 2 per cent on the week. On Wall Street, the Dow Jones industrials erased 366.94 points or 2.64 per cent to 13,522.02, for a loss of 570.53 points or 4.2 per cent this week.
“We had a great run, from August 16th until a week or so ago, some pullback was to be expected,” said John Johnston, chief strategist, The Harbour Group at RBC Dominion Securities..
- Escalating gasoline prices pushed Canada’s annual inflation rate to 2.5 per cent in September, a sharp increase from 1.7 per cent in August and the biggest jump in consumer prices in over a year.
- The Canadian dollar jumped 0.85 of a cent (U.S.) to 103.55 cents — a level last seen in mid-1976.The TSX Venture Exchange was off 37.29 points to 3,010.02. The Nasdaq composite declined 74.15 points or 2.65 per cent to 2,725.16 and the S&P 500 index edged 39.45 points or 2.56 per cent to 1,500.63.
- On the TSX, the energy sector fell 2.75 per cent at the end of a week where the price of crude had surged almost 7 per cent up to Thursday’s close on speculative buying and worries over tensions between Turkey and Kurdish rebels in northern Iraq.
Source: MarketsBlog, the Globe and Mail (Oct. 19/07)
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