The Toronto Stock Exchange Broadcast Centre is shown in Toronto on June 28, 2013.THE CANADIAN PRESS/Aaron Vincent Elkaim

TORONTO - The Toronto stock market looked set to add to Wednesday's sharp slide amid growing expectations that the U.S. Federal Reserve will start cutting back on its monetary stimulus program as early as next week.

Traders also digested a major disappointment from yoga retailer Lululemon Athletica (Nasdaq:LULU). Its stock fell 10 per cent in pre-market trading in New York after the Vancouver-based company said quarterly profit came in at US$66.1 million, or 45 cents per dilluted share, four cents ahead of forecasts. Revenues climbed to $379.9 million from $316.5 million for the quarter, above the $374.6 million analysts expected. However, it expects flat same store sales in the crucial fourth quarter.

The Canadian dollar rose 0.2 of a cent to 94.6 cents US.

Fed concerns were responsible for a 191-point tumble on the TSX Wednesday while the Dow industrials dropped 130 points.

U.S. futures were also negative as a budget deal in the U.S. Congress raised concerns that the Fed is set to start tapering its US$85 billion of monthly bond purchases.

The Dow Jones industrial futures were down 26 points to 15,810, the Nasdaq futures lost 1.7 points to 3,468.8 and the S&P 500 futures slipped 1.5 points to 1,779.25.

The budget agreement restores about $63 billion in across-the-board automatic spending cuts and would help prevent another partial shutdown of the U.S. government. Analysts believe the prospect of a shutdown over budget wrangling, along with difficulties in extending the debt ceiling, helped persuade the Fed to postpone tapering in September.

The 16-day shutdown in October crimped economic growth and hurt consumer confidence.

The prospect of Fed tapering has hung over markets since May when outgoing Fed chairman Ben Bernanke first raised the prospect of cutting back on asset purchases, if economic conditions allowed.

That's because those bond purchases have kept long-term rates low, persuaded investors to put their money in the stock market and supported a strong rally on many markets this year.

Fed tapering concerns also continued to punish bullion prices as February gold fell $21 to US$1,2362 an ounce.

Bullion prices have also been depressed amid low inflation in many countries and an improving global economy, falling about 25 per cent this year. Gold stocks have done much worse, with the TSX Global Gold sector down about 50 per cent for the year.

Elsewhere on commodity markets, January crude on the New York Mercantile Exchange gained 36 cents to US$97.80 a barrel.

March copper was flat at US$3.29 a pound.

European bourses were also in the red with London's FTSE 100 index down 0.9 per cent, Frankfurt's DAX declined 0.7 per cent and the Paris CAC 40 lost 0.6 per cent.

Earlier in Asia, Japan’s Nikkei 225 lost 1.1 per cent, Hong Kong’s Hang Seng dropped 0.5 per cent, and China’s Shanghai Composite eased 0.1 per cent.

News from © The Canadian Press, 2013