The Canadian Press

The losing streak on the Toronto stock market extended to a fourth session Thursday, with the main index losing almost 250 points as investors took profits on doubts about the strength of the American economic recovery.

The S&P/TSX composite index tumbled 248.21 points or 2.25% to 10,805.33, led by mining stocks as a rising U.S. dollar sent commodity prices and the Canadian dollar sharply lower.

Investors were dismayed with data showing sales of new homes in the U.S. dropped unexpectedly last month, falling 3.6% to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists had expected a rise of 2.6%.

Investors also pulled back after Goldman Sachs Group Inc. reduced its expectation for U.S. economic output for the July-September period. Goldman Sachs now expects third-quarter gross domestic product rose at an annual rate of 2.7%, weaker than its earlier forecast of three%.

The government’s report on third-quarter GDP is due Thursday morning and other economists have been expecting the report to show annualized growth of at least three%.

The TSX has lost 6.3% over the last four sessions. Analysts pointed out that a round of profit-taking wasn’t surprising, considering the TSX had gained about 50% since the lows of March with hardly a break.

But that gain was based on hopes for a strong economic rebound being in place by late this year and recent economic data, including a report Tuesday that showed an unexpected drop in U.S. consumer confidence, have shaken those hopes.

“I’m expecting that the recovery won’t be as robust as everybody thinks it is,” said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver.

“If I step back and ask what should I be expecting in the next six months to a year, I think you have to say to yourself, maybe this little puppy is not as robust as we thought it would be. We might trend down from the highs that we have had recently.”

The resurgent greenback sent the Canadian dollar down 1.08¢ to US92.72¢ after going as low as US92.52¢.

All TSX sectors were negative, with the energy group down 3.37% as the December crude contract on the New York Mercantile Exchange dropped $2.09 to US$77.46 a barrel despite data from the American Petroleum Institute showing a decline of 3.5 million barrels in crude inventories last week. EnCana Corp. (TSX:ECA) declined $2.49 to $59.74 on the TSX.

Nexen Inc. (TSX:NXY) reported that its profit in the third quarter fell to $122 million or 23¢ a share, down 86% from the same time last year, beating analyst estimates by a penny a share. Nexen’s revenue was cut in half to $1.1 billion and its shares were down 59¢ to $23.40.

Mining stocks were also under pressure as the December copper contract on the New York Mercantile Exchange backed off 6.85¢ to US$2.93 a pound and the base metals sector lost 6.38%. Teck Resources (TSX:TCK.B) dropped $2.34 to $30.72.

Sherritt International Corp. (TSX:S) reported that net income fell to $55.9 million or 19¢ per share in the third quarter, down from $133.1 million or 45¢ per share a year earlier because of lower commodity prices “largely due to the impact of relatively weakened global industrial demand on the base metals market.”

Revenue fell 18.5% to $389.6 million and its shares stepped back 45¢ to $6.80.

The gold sector was down 4.03% as December bullion on the Nymex lost $4.90 to US$1,030.50 an ounce. Kinross Gold Inc. (TSX:K) faded 94¢ to $19.36.

Groups outside the commodity sectors were also down sharply.

The tech sector declined 3.55% and Research In Motion Ltd. (TSX:RIM) moved down $2.30 to $65.40 while the industrial sector lost 2.58% with Bombardier Inc. (TSX:BD.B) down 27¢ to $4.20.

The TSX Venture Exchange dropped 43.05 points to 1,263.41.

Economic data also depressed New York markets and the Dow Jones industrial average dropped 119.48 points to 9,762.69.

The Nasdaq composite index gave back 56.48 points to 2,059.61 while the S&P 500 index was down 20.78 points to 1,042.63.

In other Canadian earnings news, Maple Leaf Foods Inc. (TSX:MFI) shares ran up 29¢ to $10.75 as the company said quarterly net income came in at $22.5 million or 17¢ a share, compared with a net loss of $12.9 million or 10¢ a share a year ago. Last year’s third-quarter had felt the brunt of a Listeria-induced recall at a Maple Leaf plant in Toronto.

@page_break@Quarterly revenues for the company dipped to $1.29 million from $1.34 million last year.

Methanex Corp. (TSX:MX) fell to a third-quarter loss of $831,000 or a penny per share as revenue declined due to lower methanol prices. Analysts had been expecting a loss of four¢ a share, but the company’s stock still dropped 29¢ to $18.70.