Poor consumer confidence reports in both the United States and Canada, as well as lower economic growth projections in China, sent North American markets tumbling nearly three per cent Tuesday over fears the worldwide economic recovery may be stalling.
The S&P/TSX fell 343.17 points to close at 11,263. 83, while New York's Dow Jones industrial average plummeted 268.22 points to 9,870.3. The Nasdaq composite index fell 85.47 points to 2,135.18, while the S&P 500 index was down 33.33 points to 1,041.24.
Markets stumbled after the U.S. Conference Board said late Monday it miscalculated its predictions for economic growth in China. The board said the mistake led it to forecast economic growth at 1.7 per cent for April. That figure was changed to 0.3 per cent.
Strong growth in China has been integral to the global recovery, particularly the country's demand for oil and minerals.
"Everybody got up in arms and thought if the big engine of growth globally is slowing down like this, it's not good for anybody," BNN's Mark Bunting told Â鶹´«Ã½ Channel Tuesday afternoon.
Investors were also spooked by consumer confidence reports on both sides of the border that showed consumers are wary of the slow global rebound.
The U.S. Conference Board said Tuesday its Consumer Confidence Index fell nearly 10 points in June to 52.9, down from a revised 62.7 in May. At the same time, the Conference Board of Canada said its index dropped to 83.6 in June, 13 points below its January mark.
"We are starting to see a sideways move in confidence," the Conference Board of Canada's Pedro Antunes told Â鶹´«Ã½. "We are expecting weaker spending from that over the next half of the year."
The loonie also fell Tuesday, losing 1.78 cents to close at 94.76 cents US.
The day began on a down note, with Asian markets falling on the China news, as well as figures out of Japan that said demand for exports has weakened, consumer spending has dropped and unemployment has risen.
A workers strike in Greece to protest steep budget cuts also sent European markets on a downward trajectory.
The Shanghai composite index fell 4.3 per cent, Japan's Nikkei stock average fell 1.3 per cent, Britain's FTSE 100 was down 3.1 per cent, Germany's DAX index fell 3.3 per cent and France's CAC-40 plummeted 4 per cent.
"It just shows you how nervous investors are," Bunting said. "A little bit of bad news or a combination of bad news and we see stocks tumbling like we did today."
