Stock markets added to the losses racked up during September as weaker than expected American manufacturing data fuelled concerns about a faltering global economy Wednesday.
The S&P/TSX composite index declined 93.85 points to 14,866.66 after racking up a 4.25 per cent loss in September. Among the underlying factors was speculation about the pace of future U.S. interest rate hikes.
The Canadian dollar was up 0.2 of a cent to 89.49 cents (U.S.).
The greenback weakened and U.S. markets were sharply lower as the Institute for Supply Management's manufacturing index came in at 56.6, down from 59 in August and much weaker than the 58 reading that economists had expected. It also added to weak manufacturing reports in recent days from China and Europe.
The Dow Jones industrials gave back 201.9 points to 16,841.02, the Nasdaq fell 57.51 points to 4,435.88 and the S&P 500 index was down 18.65 points to 1,953.64.
"It's been sort of a two speed world – there's been the U.S. data which has been pretty good, you can't really complain, and then everywhere else has been a lot weaker," said Michael Greenberg, co-lead manager of Franklin Quotential Portfolios.
Greenberg said investors will soon be turning their attention to third-quarter corporate earnings which could be hurt by weak overseas performance.
"It will be interesting to watch earnings, especially the bigger multinationals because the home market has been pretty good, but some of these, we're a bit worried about earnings because of foreign exposures."
Traders also considered a positive look at health of the American job market two days before the release of the U.S. government's employment report. Payroll firm ADP said that the American private sector created 213,000 jobs last month, in line with expectations.
Economists are expecting the U.S. Labor Department to report Friday that 215,000 jobs were added in September.
On the corporate front, General Motors' U.S. sales jumped 19 per cent to 223,437 cars and trucks in September on big demand for its pickup trucks. GM rose 83 cents to $32.77. Ford's U.S. sales dipped three per cent in September as the company cut back on truck discounts in anticipation of a new F-150 later this year and its shares dipped a cent to $14.71.
Investors also focused on shares of companies testing Ebola vaccines after the first U.S. case of the disease was diagnosed in Texas.
Burnaby, B.C.-based drug company Tekmira Pharmaceuticals was a major advancer. Its stock jumped almost 17 per cent to $24.66 in New York. In August, the U.S. Food and Drug Administration told Tekmira it would allow use of its investigational drug TKM-Ebola in patients with the virus.
TSX declines were led by a 1.5 per cent drop in the industrials group. Shares in Westport Innovations plunged 22 per cent to $9.17 after the natural gas engine firm cut its revenue guidance for 2014.
The TSX was well off early lows as the energy sector turned positive, up 0.25 per cent as November crude in New York gained $1.72 to $92.88 (U.S.) a barrel.
The base metals group was 0.4 per cent lower as December copper edged up two cents to $3.02 a pound.
The gold sector was ahead 0.6 per cent while December gold gained $3.60 to $1,215.20 an ounce.