Canadian investors bailed out of the markets today after a spate of poor economic news was released. The Bank of Canada made gloomy pronouncements about the economy as it cut bank rates by 25 basis points. The central bank warned that growth in the latter half of the year could come in below 3% and hinted that further rate cuts will be necessary. In the U.S., consumer confidence has fallen, according to recent data.

The Toronto Stock Exchange 300 composite index fell 83.84 points, to 7,578.40. Banks stocks did well yesterday, but today only one made it to the radar screen, even though both Bank of Nova Scotia and Bank of Montreal reported better than expected profits. Scotiabank hit a 52-week high of $50.10 this morning, but the stock ended the day down 45¢ at $49.00. After being down for most of the day, Bank of Montreal ended up by 10¢ at C$42.75. Four of the the big six banks ended lower. Royal Bank of Canada slid 52¢ to C$51.67

Overall, 12 of the TSE 300’s 14 subindexes were down, with the industrial products group falling 2.1%. Nortel Networks Corp. dropped 28¢ to$10.65. Celestica Inc. was hit by the biggest tech decline. It lost $3.93, or 6%, finishing the day at $59.72.

The Canadian Venture Exchange was also hurt by the bad economic news. The CDNX declined 22.69 to 3048.06.

The Bank of Canada rate cut was good news for the Canadian dollar. It opened at US64.78¢, and rose as much as US64.92¢. It closed at US64.88¢.

South of the border, stocks retreated today, after new economic data showed that Americans are spending less. Consumer spending has been key for the Optimists’ Camp. Consumers are less optimistic than they were in July, according to a Conference Board report, released today. More families are saying current business conditions are bad–14.9% compared with 14.6% a month ago. More are claiming jobs are hard to get. That figure rose to 15.9% from 14.1% in July.

The Dow Jones industrial average closed down 160.32 at 10222.03. The Nasdaq composite index declined 47.43 to finish the day at 1864.98. The Standard & Poor’s 500-stock index slipped 17.70 to 1161.51.