Markets end lower on European debt fears
North American stocks lost ground Wednesday, taking a late slide after Fitch Ratings put out a report saying U.S. banks could take a big hit if Europe's debt crisis spreads.
In Toronto, the S&P/TSX composite index, which had gained earlier as traders bought energy stocks as oil rose above $100 US a barrel for the first time since late August, ended down 54.91 at 12,174.36.
The TSX energy index finished 0.83 per cent higher.
In New York, the Dow Jones industrial index lost 190.57 points to 11,905.59 The Nasdaq composite index fell 46.59 points to 2,639.61 and the S&P 500 index was down 20.89 points to 1,236.92.
Oil prices rose above $100 US on Wednesday for the first time since late July as Calgary-based Enbridge said it would buy a stake in the Seaway linking Oklahoma and Texas, and reverse the flow of oil on the line to open an outlet for crude from the Central U.S. and Canada.
Traders hope the change may ease the glut of oil at a major storage hub in Cushing, Okla.
December crude closed up $3.22 at $102.59 a barrel in New York was also further buoyed by rising tensions in oil-producing countries.
Oil is Canada’s biggest commodity export.
Iran, the world's fourth-largest oil exporter, is suspected of developing nuclear weapons, according to a United Nations report earlier this month. Its nuclear program could lead to international trade sanctions, and Israel has threatened military action.
Companies operating in Nigeria also say that oil production has been hurt by spills, sabotage and outright thefts. Nigeria is one of the top five oil exporters to the U.S.
Stock markets mostly traded lower not only on concerns about how higher energy prices could slow economic growth, but also amid worries about Europe's government debt crisis continue to absorb investors.
The Canadian dollar closed down 0.20 of a cent at 97.76 cents US.
Markets continued to demand high rates on Italian bonds as Prime Minister Mario Monti succeeded in forming a new government and pledged to restart economic growth.
As well, Greece's new coalition government won a confidence vote in parliament with a large majority Wednesday, backing a pledge by Prime Minister Lucas Papademos to speed up long-term reforms and secure a massive new bailout deal involving banks and rescue creditors.
His government must pass unpopular austerity measures to receive the next round of emergency loans.
European markets closed mainly lower as London's FTSE 100 index lost 0.15 per cent, Frankfurt's DAX fell 0.33 per cent, while the Paris CAC 40 gained 0.52 per cent.
The showing in Europe followed losses in Asia, where Japan's Nikkei 225 index lost 0.9 per cent to close at a six-week closing low. Hong Kong's Hang Seng dropped two per cent and South Korea's Kospi shed 1.6 per cent. Mainland China's benchmark Shanghai Composite Index lost 2.5 per cent.
With files from The Canadian Press and The Associated Press