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Canadian stocks tumble on Fed plan

(Xinhua)

09:57, September 22, 2011

TORONTO, Sept. 21 (Xinhua) -- Canadian stocks tumbled on Wednesday after the U.S. Federal Reserve announced plans to buy 400 billion U.S. dollars of long-term Treasury securities in an effort to boost the economy after a two-day meeting.

The S&P/TSX Composite Index closed down 254.87 points, or 2.09 percent, at 11,955.01, the lowest level in a month. The S&P/TSX Venture Composite Index closed down 24.09 points, or 1.39 percent, at 1,703.78.

Investors were very much disappointed with the U.S. Federal Reserve's plan. They worried that the plan to replace short-term Treasuries with long-term ones will not be able to lower the country's elevated unemployment rate.

The index measuring the diversified metals and mining sector on the Toronto Stock Exchange (TSX) dropped 6.43 percent. First Quantum Minerals Ltd. plunged 6.41 percent, the third straight day of a dramatic fall. Teck Resources Ltd., Canada's largest base- metals producer, shed 5.76 percent.

The index measuring the industrials sector on the TSX slipped 4. 07 percent. Bombardier Inc. dropped 5.46 percent with heavy volume.

On the economic front, data released by Statistics Canada showed that the Consumer Price Index in the country rose 3.1 percent in the 12 months ending August, mainly as a result of higher prices for gasoline and food purchased from stores.

On the currency front, the Canadian dollar weakened against its U.S. counterpart for a third day.

The Canadian dollar fell to its weakest level versus the U.S. dollar this year, exceeding parity.

One U.S. dollar was buying 1.0075 Canadian dollars at 5 p.m. local time (2200 GMT) on Wednesday, compared with one U.S. dollar purchasing 0.9923 Canadian dollars on Tuesday.

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