Major North American stock indices fell 2 per cent Thursday, after Barack Obama threw the weight of his presidency behind a plan to rein in the ways of Wall Street and China appeared all but certain to tighten credit further.
Financial institution stocks tumbled in response to the President's plan that would prohibit banks from running proprietary trading operations or investing in hedge funds and private equity funds. And basic materials stocks plummeted as investors speculated that China would put the brakes on its runaway economic growth - measured at 10.7 per cent in the fourth quarter.
In Toronto, the S&P/TSX fell 210.22 points to 11469.10. The three biggest losers on the composite index were Inmet Mining, down 15 per cent, and Canfor and Franco Nevada, both off 10 per cent. But the pain was spread widely, with a variety of gold, silver, copper and uranium miners seeing their stocks fall 5 per cent. Shares of Canada's five major banks slid by between 1.3 per cent and 2.8 per cent.
The list of rising issues on the Toronto index was relatively short and included both Canadian Pacific Railway and Canadian National Railway, as well as Rogers Communications and Bell Aliant. Empire Co. and Loblaw Cos. both advanced after James Durran of National Bank Financial raised his price targets for the companies, saying the food retail industry could see price increases this year.
In New York, the Dow Jones industrial average declined 213.27 to 10389.88 and the broader S&P 500 lost 21.65 points to end at 1116.48.
JP Morgan tumbled 7 per cent, Bank of America and Citigroup fell 6 per cent, Morgan Stanley and Goldman Sachs sank 4 per cent.
The price of oil decreased $1.66 a barrel to $76.08 (U.S.). Gold dipped $9.40 an ounce to $1,103.20.
The Canadian dollar continued its slide, losing four-tenths of a cent to end the day at 95.11 cents (U.S.).