By Amran Abocar
Reuters
Wednesday, April 28, 2004
TORONTO, April 28 (Reuters) - Negative news from Nortel Networks Corp., coupled with slumping commodity prices, delivered a one-two punch that sent Toronto stocks reeling to near four-month lows on Wednesday.
Adrian Mastracci, investment counsel and president of Vancouver based ‘fee-only’ KCM Wealth Management, says, "We have to look past today. If you get embroiled in today, you'll never make another investment.”
The Toronto Stock Exchange's S&P/TSX composite index plunged 287.69 points, or 3.37 percent, to 8,247.33 on a heavy volume of 409 million shares worth C$6.9 billion.
The market closed at its worst level since Dec. 31 and touched its lowest intraday level since early January.
"The news has been totally dominated by the Nortel fiasco, and that has affected sentiment across the board," said Elvis Picardo, chief market strategist at Global Securities Corp.
"We're seeing yet another down day and they seem to be coming more frequently now than they had in the last 12 months -- the big drops.
All of the TSX's 10 subgroups ended lower, led by a 9.42 percent plunge in the technology sector as Nortel (NT.TO) dragged the market lower.
Nortel shares plunged C$2.18, or 28.76 percent, to C$5.40 with 102 million shares changing hands. The telecoms gear maker fired its three top executives on Wednesday and said accounting problems already under investigation by regulators ran deeper than expected.
The Nortel news also weighed on the Canadian dollar.
"Apart from the Nortel story, we're also seeing a lot of money leaving the commodity sector as the U.S. dollar is extremely strong today," Picardo added.
Metal stocks took a hit amid fears that demand from China would dry up as the country takes stringent steps to rein in breakneck economic growth. The voracious appetite of the world's sixth-biggest economy had propelled a range of commodity prices higher for several months.
Chinese Premier Wen Jiabao told Reuters the country may take forceful action to slow its economy, likely limiting money available for steel, cement and aluminum projects.
Toronto's materials sector shed 4.91 percent, with its component mining subgroup down 6.08 percent. Gold-mining stocks fell 6.5 percent.
The news from China accelerated a downturn in metals prices, which were already under pressure as the U.S. dollar rallied ahead of Thursday's first-quarter U.S. GDP report, which is expected to be strong.
The energy and industrials sector sagged more than 3 percent while telecoms, utilities, and health-care endured more than 1 percent declines.
Market momentum was overwhelmingly negative with 1,033 decliners and only 301 advancers.
"We have to look past today. If you get embroiled in today, you'll never make another investment," said Adrian Mastracci, president of KCM Wealth Management Inc.
The blue-chip S&P/TSX 60 index slumped 17.38 points, or 3.67 percent, to 456.18.
In New York, the Dow Jones industrial average retreated 135.56 points, or 1.29 percent, to 10,342.60 while the Nasdaq composite index dropped 42.99 points, or 2.12 percent, to 1,989.54.
($1=$1.37 Canadian)
|
