I'm in the business so get stuff sent to me daily. Here is part of today's market report. Mods: This is a very part of the entire article.
The Toronto stock market plunged almost 5%Monday in one of its worst one-day losses ever as investors judged a U.S. economic stimulus plan announced on Friday as not enough to keep the U.S. from sliding into recession. [/font]
The S&P/TSX composite index closed down 604.98 points or 4.75%, to 12,132.14.
Investors also worry about fragile credit markets while analysts say it's very difficult to see a bottom to a series of declines that have sent global indexes down sharply this month.
"It's going to be something that will have to be waited out over time, and we're going to have to see some positive data come out before people regain confidence, and that's really what's missing here is confidence," said Gareth Watson, associate director of Canadian equity adviser at Scotia McLeod in Toronto.
"Investors just don't have any confidence at all and when we start to get that confidence restored -- which could easily take at least another six months minimum -- I don't think people are expecting a sustainable material rally in the marketplace."
The U.S. stimulus plan calls for about US$145 billion worth of tax relief to encourage consumer spending but some say it's too little, too late and instead want the U.S. Federal Reserve to cut interest rates aggressively at the end of this month.
The Toronto market posted a similar point loss on Feb. 16, 2001, when the tech bubble was bursting and Nortel Networks -- then a market heavyweight -- announced a disappointing profit forecast along with the elimination of 6,000 jobs. But the main index stood at around 8,400 points in those days, so the percentage loss was much worse -- 6.4%.
My comment:
Remember, the more it falls the more likely the recovery and the sharpest declines tend to be followed by the sharpest recoveries. Also remember that this is a buying opportunity.
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