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Traders work on the floor of the New York Stock Exchage on Oct. 2, 2014 in New York City.Spencer Platt/Getty Images

North American stocks are falling sharply in midday trading, a day after the market had its biggest gain of the year.

The S&P TSX fell 169.5 points, or 1.16 per cent, to 14,496.94 on Thursday afternoon, it's lowest level since May of this year.

The Dow Jones industrial average dropped 223 points, or 1.3 per cent, to 16,774, while the Standard and Poor's 500 fell 25 points, or 1.3 per cent, to 1,943 and the Nasdaq composite fell 54 points, or 1.2 per cent, to 4,414.

Energy stocks dropped as the price of crude oil fell again. Benchmark U.S. crude fell $1.02 to $86.28 (U.S.) a barrel. Exxon Mobil fell the most in the Dow.

Stocks jumped Wednesday after minutes from the Federal Reserve's latest meeting indicated the central bank was in no hurry to raise interest rates.

Thursday's downward moves came as the latest data showed German exports in August dropped 5.8 per cent over July as increasing uncertainty over the crisis in Ukraine helped to produce the largest drop in five years.

The data prompted ING economist Carsten Brzeski to say that "the economy seems to need a small miracle in September to avoid a recession."

It also came out a day after minutes from the latest U.S. Federal Reserve meeting showed that Fed officials are becoming increasingly concerned about weak overseas growth.

A faltering global economy is one reason that Fed officials have moved away from linking any increase in interest rates to any specific period, meaning rates will rise only when measures of the economy's health and inflation signalled the time was right.

The TSX has had a tough time since hitting 2014 highs in late August, having fallen almost 1,100 points from a year-to-date gain of over 14 per cent on economic concerns and a surging U.S. dollar.

But some analysts think seasonality is also a culprit.

"People come back from vacation, see (the market) at all-time highs and say, they're due for a pullback, let's pull some money off the table," said Allan Small, senior adviser at HollisWealth.

Small doesn't think investors are in for a major correction in the 15 per cent range, but thinks markets will stay choppy until after late in October.

At that point, he thinks "you will see strong fundamentals out of the companies that are reporting earnings over the next few weeks And I am hoping that will be enough to calm the markets, regardless of what economic data is coming out of Europe."

The base metals component lost 2.6 per cent even as December copper gained five cents to $3.05 (U.S.) a pound.

The gold sector lost 2.55 per cent while December gold jumped $20.80 to $1,226.80 an ounce.

On the corporate front, Canadian Tire Corp. plans to invest an average of $575-million annually over the next three years on business improvements while buying back an additional $400-million of its class A non-voting shares by the end of 2015. Its shares rose $2.67 to a 52-week high of $119.75 (Canadian).

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