TSX loses ground amid weak outlook from resource giant Alcoa

Dollar closes at $ 101.97 US, oil dips to $ 91.25 US a barrel

TORONTO — Deteriorating global economic prospects continued to weigh on the Toronto stock market Wednesday amid a weak outlook from resource giant Alcoa Inc. and a pessimistic assessment from the International Monetary Fund.

The S& P/ TSX composite index fell for a third session, down 61.15 points to 12,212.42 while the TSX Venture Exchange dropped 25.66 points to 1,302.15.

The Canadian dollar was off 0.22 of a cent to 101.97 cents US.

New York indexes were also negative even as the U. S. Federal Reserve said that stronger housing markets helped boost economic growth at the end of the summer in nearly every region of the United States.

The Dow Jones industrials racked up a second consecutive triple- digit loss, falling 128.56 points at 13,344.97.

The Nasdaq shed 13.24 points at 3,051.78, and the S& P 500 index edged down 8.92 points to 1,432.56.

The Fed noted in its most recent regional survey that the economy “expanded modestly” across all 12 districts during September.

But CIBC World Markets senior economist Peter Buchanan noted that in contrast, “the August Beige book used the slightly stronger term ’ moderate’ for three of the 12 districts, implying some slight softening in momentum in several districts.”

Markets were firmly in the red all day after Alcoa predicted after the close Tuesday that aluminum demand would grow six per cent this year, down from seven per cent in the previous quarter, primarily because of slower growth in China. The aluminum producer is viewed as a broad economic bellwether as its products are used in a wide variety of industries, from vehicles to appliances.

Alcoa shares were down 4.6 per cent as the company kicked off the start of the third- quarter reporting season by posting a loss of US$ 143 million, largely on onetime charges, while adjusted results beat estimates. Revenue of $ 5.83 billion also beat expectations.

On top of that, the International Monetary Fund on Tuesday reduced its growth forecast for the world economy to 3.3 per cent this year from its previous estimate of 3.5 per cent.

Expectations for third- quarter earnings have been ratcheted lower because of global growth concerns. Analysts expect earnings for Standard & Poor’s 500 companies to be lower than a year ago, the first time that has happened in almost three years.

The energy sector led decliners, down one per cent as the November crude contract on the New York Mercantile Exchange gave up early gains, declining $ 1.14 to US$ 91.25 a barrel on diminished demand prospects.