TSX down 5.3% at close
North American stock markets plunged again Monday, driven by economic doubts and concern about the $700-billion US bailout of the American financial system.
In both Toronto and New York, indexes fell through the 10,000 level in early trading, rebounded slightly, fell again and then moved up.
|Bad days on the TSX|
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By the close Monday, the S&P/TSX composite index was down 572.92 points, or 5.3 per cent, to 10,230.43. It had been down as much as 1,180 points or almost 11 per cent.
The TSX began to drop in the summer, but the fall has become steeper since late August, and trading in late September and October has been frantic, with frequent big drops.
In New York, the Dow Jones industrial average closed down 369.88 points, or 3.6 per cent, to 9,955.50. That's the lowest level in four years.
Worldwide, investors were concerned with the effectiveness of the U.S. bailout, signed into law by President George W. Bush on Friday. It will take some time to implement and may not be enough to turn around the credit crunch, critics have said.
The credit crunch is threatening to choke the supply of loans to borrowers. As that happens, the economy will seize up.
'The markets need to correct themselves, and the government can do little to stop it.'
In Toronto, the falling oil price — off $6.07 US to $87.81 US a barrel — pushed the energy sub-index down 9.4 per cent, the sharpest drop among the industry groups. The gold sub-index fell, even though the price of gold, a traditional safe harbour in uncertain times, was up $33.80 US an ounce to $862.70.
The biggest percentage drop on the TSX happened on Black Monday, Oct. 19, 1987, when the market fell 11.32 per cent.