Markets tumble on economic worries
Oil takes biggest one-day drop in four months
North American stock markets plummeted and commodities sold off sharply Thursday on growing pessimism about the recovery and worry about European governments with high debt.
In Toronto, the S&P/TSX composite index finished down 261.7 points, or more than two per cent, to 11,128.76, its biggest one-day slide since early October. New York indexes also retreated more than two per cent, with the Dow Jones industrials ending the day off 268.37 points to 10,002.18.
The Nasdaq composite index lost 65.48 points to 2,125.43 while the S&P 500 index shed 34.17 points to 1,063.11.
The Canadian dollar closed down 0.91 of a cent to 93.22 cents US and the March crude contract on the New York Mercantile Exchange ended down $3.84 at $73.14 a barrel, its biggest one-day drop in four months. The April bullion contract closed down $49 to $1,062.40 an ounce.
Investors had much to worry about. A report out Thursday showed claims for jobless benefits by newly laid-off workers in the U.S. rose unexpectedly last week by 8,000 to 480,000. Many economists had expected a drop to 460,000.
That didn't bode well for unemployment numbers due out Friday in both Canada and the U.S. Many traders are expecting Canada to have created 15,000 jobs in January, while the data out of the U.S. will show the American economy added 20,000 jobs during January, with an increase in the jobless rate to 10.1 per cent from 10 per cent.
Traders worry about Greek debt
Adding to that, on Wednesday, the European Commission gave its cautious backing to the Greek government's plan to slash the budget deficit from around 13 per cent of economic output in 2009 to below three per cent in 2012, but the markets aren't fully convinced Greece can pull that off.
European traders also worry about Portugal and Spain, which are facing mounting difficulties dealing with their own budgets.
As well, the Bank of England announced it will not be asking the government for the authority to pump more newly created money into the barely recovering British economy, as it tries weaning the economy off government stimulus.
With files from The Canadian Press