TORONTO — The Toronto stock market plunged more than 500 points today as metals and financial shares pushed the main index down, and the loonie took its biggest one-day drop on record.
Toronto’s S&P/TSX composite index tumbled 501.43 points to 8,922.57 as the Canadian dollar fell 2.77 cents to 80.81 cents — its lowest close since Oct. 28.
On the TSX, losses were led by the diversified metals sector, which slid 12.4 per cent.
The energy sector dropped 7.5 per cent as the price of crude oil closed at its lowest level since January 2007.
Light sweet crude for December delivery fell $3.17 to close at $56.16 US a barrel on the New York Mercantile Exchange.
The financial sector fell 4.4 per cent with Manulife Financial Corp. down 9.3 per cent, losing $2.40 to $23.35.
The Bank of Canada said it will inject an additional $8 billion into tight money markets under new liberal terms, and Finance Minister Jim Flaherty said Ottawa will purchase another $50 billion in residential mortgages, adding to last month’s move to pick up $25 billion in mortgages.
Wall Street plunged for its third straight session with the Dow Jones industrial average losing 411.30 points to 8,282.66. The Nasdaq composite index fell 81.69 to 1,499.21, while the S&P 500 declined 46.65 to 852.30.
American Treasury Secretary Henry Paulson said the government’s $700-billion  US financial rescue package will not be used to purchase troubled assets from banks as originally planned.
The TSX gold sector was down 3.7 per cent as gold futures moved to their lowest level in more than two weeks. The December bullion contract fell $14.50 to $718.30 US an ounce.
The TSX Venture Exchange fell 49.83 to 822.50.
U.S. retailers continued to abandon optimism ahead of the holiday shopping season. Consumer electronics seller Best Buy Co. cut its sales and profit guidance on fears that consumer spending will erode even further. And U.S. department store operator Macy’s Inc. lost $44 million in the third quarter.
The tumbling markets are a combination of overall concerns about the slowing global economy and some of the economic developments and weak retail sales coming out of the United States, said Norman Raschkowan, chief investment officer at Mackenzie Financial Corp.
“I think what we’re doing is putting money gradually into the market. We don’t know whether the bottom is today, but we know we’re close to it. I think the pace of the recovery is going to be rather muted,” he said.
Thomson Reuters Corp. reported quarterly net income of $381 million US, down 87 per cent from a year-ago, while operating profit grew 33 per cent excluding one-time items. It shares closed ahead 73 cents to $27.33 Cdn.
Nortel Networks Corp. stock fell another 32 per cent after the company said Monday it’s cutting 1,300 jobs amid “worsening economic conditions” and reported a quarterly net loss of $3.41 billion US. Shares lost 33 cents to 71 cents.
Teck Cominco Ltd. dropped another 24 per cent, or $2.12, to $6.63. Teck said yesterday that contrary to rumours, it is not planning a stock offering to raise money to pay debt.
In the U.S., Morgan Stanley outlined plans to cut 10 per cent of the staff in its institutional securities group, following a previous decimation earlier this year.
And American Express Co. is seeking $3.5 billion US from the government to help boost its balance sheet, according to the Wall Street Journal. AmEx won approval Monday from the Federal Reserve to become a bank holding company, which allows it to grow a deposit base and access financing from the Fed.
The future of North American automakers remained a major concern. U.S. House Speaker Nancy Pelosi wants Congress to support a financial bailout, and president-elect Barack Obama has urged President George W. Bush to support aid for the industry.
Democrats in Congress have begun drafting legislation that would give General Motors, Ford and Chrysler access to $25 billion of rescue funds.