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The close: TSX falls most in three months as oil fall hits energy stocks

A TSX tote board is pictured in Toronto in this file photo.

Frank Gunn/The Canadian Press

Canada's main stock index ended lower on Tuesday, as a sharp fall in oil prices weighed on energy stocks and disappointing economic data from China pushed down shares of mining companies.

The Toronto Stock Exchange's S&P/TSX composite index unofficially closed down 113.13 points, or 0.71 per cent, at 15,913.13. That was its sharpest one-day fall in more than three months.

The energy group retreated 3.3 per cent, with Canadian Natural Resources Ltd losing 4.5 per cent to $43.82 and Suncor Energy Inc off 1.4 per cent at $45.56.

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Cenovus Energy Inc, which said on Monday it had reached a deal to sell its Weyburn oil facility for $940-million, fell 4.9 per cent to $13.25

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.9 per cent. Diversified miner Teck Resources Ltd fell 3 per cent to $26.97.

Oil prices fell for a third day in a row on Tuesday on forecasts for rising U.S. crude output and a gloomier outlook for global demand growth in a report from the International Energy Agency (IEA).

In addition, analysts said oil prices were pressured by a global commodities selloff, led by base metals like nickel and copper, due to weaker-than-expected economic data from China.

Brent futures fell 95 cents, or 1.5 per cent, to settle at $62.21 a barrel, while U.S. West Texas Intermediate (WTI) crude lost $1.06, or 1.9 per cent, to end at $55.70, the lowest close for both contracts since Nov. 3.

Market watchers said declines in recent days caused hedge funds and some other traders to get nervous and sell out of their positions after speculators amassed a record bullish position in the petroleum complex.

Just last week, prices for both crude benchmarks hit their highest levels since 2015.

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Ahead of data from the American Petroleum Institute (API), an industry trade group, analysts in a Reuters poll forecast U.S. crude stocks declined by 2.2 million barrels last week. API will release its report at 4:30 p.m. EST on Tuesday.

U.S. stock indexes fell on Tuesday as General Electric shares plunged for a second straight day and a drop in crude oil prices hit energy stocks.

GE fell 5.9 per cent to $17.90 in the largest daily volume in two years as investors wondered if a massive overhaul of the company by new Chief Executive John Flannery will be enough to revive the industrial conglomerate.

The stock touched $17.46, its lowest in nearly six years.

Energy was the largest decliner among the 11 S&P 500 sectors as oil prices fell the most in a month. The International Energy Agency forecast rising U.S. crude output and had a gloomy outlook for global demand growth.

Exxon fell 0.8 per cent and ConocoPhillips was down 2.5 per cent, while the S&P 500 energy sector fell 1.5 per cent, the most in more than four months.

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The Dow Jones Industrial Average fell 30.23 points, or 0.13 per cent, to end at 23,409.47, the S&P 500 lost 5.97 points, or 0.23 per cent, to 2,578.87 and the Nasdaq Composite dropped 19.72 points, or 0.29 per cent, to 6,737.87.

Stocks favored by investors seeking yield, the so-called bond proxies, were the best performers as the yield curve, or the gap between short- and long-term U.S. government bond yields, remained near its flattest in a decade.

Utilities and consumer staples, sectors that pay relatively high dividends, were the best performers on the day. Utilities rose 1.2 percent for a 2.4 percent gain since Friday's close, the largest two-day percentage gain since late February.

"People are looking for yield across the globe so potentially there's foreign flows going into bond proxies," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management in New York.

He said the outperformance of stocks in the utilities and consumer staples sectors could also be due to investors getting more defensive "after growth sectors and the overall market have been doing so well this year."

The S&P 500 fell for the third session in the last four, but it remains within 1 per cent of a record closing high hit last week.

TV streaming device maker Roku snapped a three-day winning streak after hitting a record high of $48.80, ending down 13.5 per cent at $36.95.

Advance Auto Parts soared 16.3 per cent to $95.72 after it affirmed its full-year profit forecast and beat quarterly profit estimates.

World stocks were down for the fourth day in a row on Tuesday, while strong economic growth in Germany boosted the euro to an almost three-week high.

U.S. Treasury two-year note yields climbed to a nine-year peak while long-dated debt yields fell, flattening the yield curve flattened for a second straight day, while investors braced for a Federal Reserve December rate hike.

In Germany a 0.8-per-cent third-quarter growth reading beat forecasts and showed the economy expanding at annualised rates of more than 3 percent.

"It's been a euro trade today, and it's stronger against just about everything," Brad Bechtel, managing director FX at Jefferies in New York, said. "The numbers out of Germany were pretty good last night."

The dollar index fell 0.74 per cent, with the euro up 1.13 per cent to $1.1797.

On Wall Street, investors sought updates on rival U.S. House of Representatives and Senate tax reform proposals. Republican U.S. Senator Rand Paul said he would seek to add a provision to repeal Obamacare's requirement Americans obtain health insurance and scale back its elimination of a federal deduction for state and local taxes.

"As proposed, both plans, but especially the House package, would be good for corporate America. There's uncertainty whether anything is going to be passed or how much compromise is going to occur," said J. Bryant Evans, portfolio manager at Cozad Asset Management, in Champaign, Illinois.

After an upcoming break for the Nov. 23 U.S. Thanksgiving holiday, there are only 12 legislative days before year-end.

The pan-European FTSEurofirst 300 index lost 0.69 per cent and MSCI's gauge of stocks across the globe shed 0.17 per cent.

Monetary policy was also on traders' minds with the heads of the U.S., European, British and Japanese central banks attending a European Central Bank conference in Frankfurt.

The U.S. two-year yield hit a nine-year peak just shy of 1.7 per cent, up from Monday's 1.687 per cent.

Benchmark 10-year notes last rose 6/32 in price to yield 2.3788 percent, from 2.4 percent late on Monday.

Stocks in Asia had fallen after China's retail sales and industrial output data missed market expectations.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.4 per cent in its third consecutive day of losses. Japan's Nikkei was unchanged after four sessions of losses.

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