The Toronto Stock Exchange was mired in the red at midday Thursday as commodity prices sank on reports of slower growth in the euro-zone and China, fuelling fears that demand for Canadian resources will shrink
The S&P/TSX Composite Index lost 81.03 points to greet noon ET at 12,355.46.
The Canadian dollar stumbled 0.76 cents at 100.03 cents U.S.
Investors took in disappointing data on Canadian retail trade and Employment Insurance claims from January, a report showing an improving jobs situation in the U.S. and weak manufacturing data from China and Europe.
The mining sector dipped sharply with shares in Teck Resources off 70 cents at $35. Among energy shares, Canadian Natural Resources down 99 cents to $33.98.
The Canadian index is skewed toward the energy and materials sectors, which have taken a hit since China announced it wants to focus future growth on consumer spending rather than infrastructure building -- meaning a decline in demand for materials
While Canadian earnings season has largely come to a close, there was a positive report from one of the country's fastest growing companies.
Lululemon Athletica Inc. posted net income of $73.5 million U.S. or 51 cents per share for the three months ended Jan. 29, beating analyst expectations by two cents per share.
That compared with earnings of $54.8-million or 38 cents per share in the year-earlier period.
However, it also revised its 2012 earnings guidance to a range of $1.50 to $1.57 cents per share, lower than what analysts had been expecting. Lululemon stock was down 28 cents to $73.23.
U.S. President Barack Obama is also expected to give a speech later Thursday that will order federal agencies to expedite the approval process for the southern leg of TransCanada's $7.6-billion Keystone XL pipeline. The company's shares added 35 cents to $43.15 in early trading on the TSX.
On the economic beat, Statistics Canada reported that those drawing regular Employment Insurance benefits increased by 12,400, or 2.3% to 561,100 in January. This increase returned the number of beneficiaries to roughly the same level as in June 2011. Eight provinces saw hikes, the largest in Quebec.
The agency also said retail sales rose 0.5% in January, a fifth increase in six months, propped up mostly by sales at motor vehicle and parts dealers
The TSX Venture Exchange lost 26.62 points to 1,550.98, while the Nasdaq Canada index subsided 2.58 to 412.29
All but one of the 14 Toronto subgroups were negative by lunch hour. Metals and mining, global base metals and energy stocks were each down 2%.
Only telecoms offered some hope, inching up 0.1%.
In New York, stocks fell Thursday, as investors were rattled by worries of a global growth slowdown. Both China and Germany reported soft manufacturing data.
The Dow Jones Industrials shed 67.13 points to break for lunch at 13,057.50.
The S&P 500 gave back 8.98 points to 1,393.91, while the Nasdaq subtracted 11.38 points to 3,063.94
Still, traders say volumes have been abnormally low this week, indicating that investors don't have strong convictions about the direction of the market.
ConAgra reported earnings of 51 cents U.S. per share on $3.4 billion U.S. in revenue, slightly better than analysts had expected. Shares dropped slightly.
Athletic apparel maker lululemon athletica reported that revenue surged 51.4% to $371.5 million U.S. in the fourth quarter, topping analyst estimates. But shares dropped almost 2%, because the company lowered guidance.
McDonald's said Wednesday that CEO Jim Skinner plans to retire at the end of June, ending a seven-year turn at the helm of the fast-food restaurateur. The company's current president and COO, Don Thompson, will succeed Skinner.
Early Thursday, a reading on Chinese manufacturing compiled by HSBC showed the index hit a four-month low in March. The new reading came in at 48.1, down from 49.6 in February.
A reading below 50 indicates the sector is contracting, and HSBC said that a significant drop in new orders acted as the primary drag on manufacturing. Reflecting a broader slowdown, China lowered its growth target and hiked gasoline prices in recent weeks.
A reading on manufacturing activity in Germany showed the euro-zone stalwart also hit a soft patch in March, as the sector registered only a marginal expansion.
In matters economic, the U.S. government reported that first-time claims for unemployment benefits in the week ended March 17 dropped to 348,000, a four-year low and a better number than analysts had expected.
The Conference Board's Leading Indicators Index for February increased by 0.7%, more than the expected 0.6% uptick.
The price on the benchmark 10-year U.S. Treasury gained ground, pushing the yield lower to 2.27% from 2.29% Wednesday. Treasury prices and yields move in opposite directions.
Oil for May delivery dumped $2.26 to $105.01 U.S. a barrel.
Gold futures for April delivery fell $18.20 to $1,631.10 U.S. an ounce.