Attack fears offset stimulus budget as loonie drops and TSX sells off

Toronto stockswere lower Wednesdayas worries over the attacks in Belgium outweighed the stimulus contained in yesterday's federal budget.

The S&P/TSX composite index closed down 112points to13,381 as commodities dropped in price. The West Texas Intermediate oil contractl lost 3.8 per cent or $1.64to trade at $39.81 US a barrel, and even gold which normally does well in times of uncertainty sold off, down $27to $1,220US an ounce.

Oil sold off because of new data out of the U.S. showing stockpiles rising last week to a record532.5 million barrels.

The focus for some investors was on events in Europe, whereattacks killed at least 30 people in Brussels on Tuesday, raising fears that global trade, travel and sentiment could be disrupted by a new round of bombings.

That overshadowed the federal budget on Tuesday, a document that showed Ottawa plans to go almost $30 billion intothe red this year to stimulate growth.

"Thebudgetessentially confirmed that the government will run large deficits for the next few years to support the economy," BMO economist Sal Guatierinoted.

Deficit spending canoften be viewed asgood news for Canada's economy.But some saidOttawa's spending plans may not stimulate the economy as much as some had hoped, withNomuraeconomist CharlesSt-Arnaudnoting "the balance between increases in investment in infrastructure and tax credits is tilted toward the latter, meaning that the stimulatory impact of the new measures could be lower."

"The market is taking a little bit of a 'now what?' approach," saidBill Northey, chief investment officer at U.S. Bank Private Client Group.

The looniewas slightly lower on Tuesday and continued that fall on Wednesday, losinga pennyto change hands at 75.67 cents US.