Stocks nosedive in volatile trading

After flirting with meagre gains on early Thursday, North American markets plunged as global recession fears that pummelled overseas markets began to take hold again here.

The Toronto Stock Exchange’s main index, which initially posted double-digit gains, turned negative – along with U.S. stocks – after sell-offs in Asia and Europe, and in North American the previous day.

Adding to the gloom was a government report Thursday that showed Canadian manufacturing shipments fell in August.

The S&P/TSX composite index was down more than 330 points at midday, after falling more than 500 point in the morning.

In the U.S., the Dow Jones industrial average was down 170 points, while the Nasdaq composite index was 17 points lower.

Earlier Thursday, data showed the number of Americans filing for first-time jobless benefits fell last week. Another report showed U.S. consumer prices were unexpectedly flat in September.

In Europe, shares continued to fall. The Dow Jones Stoxx 600, a gauge for stocks across the continent, fell 12 per cent over the last two days, its biggest two-day decline since the crash of Oct. 19-20, 1987.

Before the U.S. economic reports were released, Japan’s benchmark Nikkei stock average lost more than 11 per cent.