TSX, Dow dive 1.5%, Canadian dollar below 90 cents

Stock markets in Toronto and New York saw their main indexes fall by 1.5 per cent Thursday, amid a lacklustre economic picture and a stumble by market darling Apple.

The Canadian dollar closed below90 cents US at 89.99, pressured by a stronger U.S. dollar and thesteep slide in stock markets.

The Dow industrials index fell 1.5 per cent or 264 points to 16,945.80.

The S&P 500 index lost 32.31 points, or 1.6 per cent, to close at 1,965.99.The Nasdaq composite, which is dominated by technology companies, dropped 88.47 points, or 1.9 per cent, to 4,466.75.

Stocks have been turbulent this week after a summer of optimism. Earlier this week there was concern about slowing growth in China and falling U.S. home sales.

On Thursday, there was more bad news about the U.S. economy, including a drop in orders for U.S.-manufactured goodsand fewer business orders for new equipment.

There were also indications of widening unemployment, with 293,000 people applying for benefits on a seasonally adjusted basis, down from estimates but up from the previous two weeks.

A pullback? or a slight correction?

It was the longest losing streak on the TSX in more than a year. Financials, including National Bank of Canada, which was down one per cent at $51.14, led the declines. The banks are vulnerable to rising interest rates, which could come by next spring.

BlackBerry Ltd. retreated 61 cents to 11 after unveiling its Passport smartphone yesterday.

Investors were divided on whether this was the beginning of a major pullback or a slight correction amid a strong run.

"There's just an absence of real news to chew on," said MarkLuschini, the chief investment strategist atJanneyMontgomery Scott. "When you're at a peak, markets need more and more good news to keep climbing."

The U.S. index has lost twoper cent this week but is still up sixper cent for the year.

Bull analyst JohnIngofMaisonPlacements Canada says the Toronto equity markets have run ahead of fundamentals.

And a report out earlier this week showed the ultra-wealthy are not investing at the current time, but keeping their assets in cash. Many see this as a sign of lack of confidence in the bull market.

Dollar suffering against greenback

The Canadian dollar has been hard hit this week by the steady gains in the U.S. greenback, which is at a four-year high with other currencies.

Investors believe that the U.S. Federal Reserve is heading nearer towards a rate hike, in contrast to the European Central Bank, which is cutting rates and buying assets.

"The theme driving the U.S. dollar continues to be a strengthening U.S.economy relative to other economies," saidRahimMadhavjiofKnightsbridgeForeign Exchange in a note.

"However, with Canada's economy closely tied to the U.S. economy over time, Canada should eventually benefit from a strengthening U.S. economy."

Low commodity prices have also affected the Canadian market, with oil, gold and copper falling.

WTI oil futures in New York were selling at $94.28 a barrel today, and remained unaffected by the bombing of oilfields in Syria overnight.

At least four oil installations and three oil fields that sell oil on behalf of the militant group ISIS were hitaround the town of Mayadeen. The group is estimated to earn $3 million US a day from oil revenues.

However, oil exports from Syria to the U.S. or EU have been banned since March 2011, so the strike doesnt affect North American oil supply.