TORONTO – The Toronto stock market has tumbled almost 500 points after an unprecedented credit rating downgrade of U.S. government debt by Standard and Poor’s helped give added momentum to a four-week-old selloff.
American stocks were also hard hit, with the Dow industrials dropping 634.76 points or 5.5 per cent to 10,809.85. The Nasdaq fell 174.72 points to 2,357.69 while the S&P 500 index lost 79.92 points to 1,119.46.
Friday’s downgrade by S&P served to further dent confidence that American and European leaders can stem worsening economic conditions and deal with a European government debt crisis.
The S&P/TSX composite index fell 491.75 points or four per cent to 11,670.42 on top of an 800-point plunge last week.
The Canadian dollar has also fallen, closing down 1.25 cents to just above parity with the U.S. dollar at 100.92 cents US.
Gold surged $61.40 to a record close of US$1,713.20 an ounce and demand concerns pushed oil down $5.57 to US$81.31 on top of an $8 slide last week.