(RTTNews) - Canadian stocks gave back most of their historic gains from the previous session on Wednesday as yesterday’s euphoria over coordinated efforts to end the credit crisis gave way to recession fears.

There was some thawing of frozen credit markets, but evidence that the world is on the verge of a deep and prolonged slowdown sent investors back to the sidelines en masse.

On Bay Street, traders booked profits from yesterday’s nearly 900 point advance. The S&P/TSX Composite Index fell 631.83 points to 9323.83, moving back toward Friday’s 3 1/2 year closing low.

The selling was furious on both sides of the border, as the Dow dropped more than 700 points.

Canadian energy stocks were pummeled as oil again turned lower. The Energy Index fell 12 percent, led by massive losses from Canadian Natural Resources (CNQ.TO) and Suncor (SU.TO).

Crude oil closed below $75 a barrel Wednesday for the first time in nearly 14 months on declining demand expectations. Light sweet crude for November delivery ended the session at $74.54, down $4.09 for the session.

EnCana (ECA.TO) shares fell 13 percent after announcing it will delay the timing of a shareholder vote for its proposed split into two independent energy companies. The vote was originally planned for December and now delayed until such time as the financial markets stabilizes.

Other resource producers also came under heavy pressure as most commodity prices tumbled. The Diversified Metals and Mining Index fell 8 percent, as Teck (TCK.B.TO) shares plummeted 17 percent to a multi-year low.

Agricultural product makers Agrium (AGU.TO) fell 12 percent, while Potash (POT.TO) plunged 17.4 percent.

Railroads were punished on Wednesday, helping to drive the Industrial Index lower by 5.5 percent. Canadian Pacific (CP.TO) fell 10.2 percent, while CN Rail (CNR.TO) dropped 7.3 percent.

Across the border in the US, a number of key economic reports showed the world’s biggest economy may contract in the third quarter. US retail sales fell by more than expected in the month of September, according to a report released by the Department of Commerce on Wednesday, with the decrease in sales partly due to a substantial drop in auto sales.

Federal Reserve Chairman Ben Bernanke warned Wednesday that it will take “some time” to unfreeze the credit markets. He also noted that even after credit markets return to normal, the economy is not likely to return to its potential growth right away.

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Posted in Categories: Canada, Releases, Stocks, USA.

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