TSX tumbles 300 points: Fed sees slower bond buys, Chinese manufacturing slips

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TORONTO - The Toronto stock market headed deeper into the red after the U.S. central bank signalled that investors will have to get used to less economic stimulus and ultimately higher interest rates.

The S&P/TSX composite index tumbled 299.71 points or 2.44 per cent to 11,968.57, leaving the TSX down 465 points or 3.75 per cent so far this year. The dollar dropped 0.94 of a cent to 96.4 cents US.

New York's Dow industrials plummeted 353.87 points to 14,758.32 after dropping 206 points Wednesday. The Nasdaq fell 78.57 points to 3,364.63 and the S&P 500 index lost 40.74 points to 1,588.19.

The slide was partly triggered by a disappointing read on Chinese manufacturing.

But the greatest damage to market sentiment came from the Fed after chairman Ben Bernanke signalled a slowing of huge purchases of bonds which have kept long-term interest rates low. The inflows of cash into financial markets have also helped fuel a boom on many stock markets this year.

Oil fell $2.84 to US$95.40 a barrel.

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