Canada's benchmark stock index slumped by the most in five months on Friday, in a broad-based retreat led by sharp falls in its heavily-weighted energy and financial sectors.
The Toronto Stock Exchange's S&P/TSX composite index unofficially closed down 247.73 points, or 1.57 per cent, at 15,533.47.
For the week, the index fell 1.9 per cent, the most since before the U.S. presidential election in early November, while stocks on Wall Street reversed losses in a late session surge as investors assessed whether the "Trump rally" had gone too far too soon.
Royal Bank of Canada reported quarterly earnings of more than $3-billion for the first time, beating market forecasts.
Still, its shares fell 1.7 per cent to $96.61, and the financial services sector retreated 1.4 per cent.
Auto parts maker Magna International Inc. tumbled 5.5 per cent to $55.92 after it reported a lower-than-expected quarterly profit as costs rose.
The energy group tumbled 3.3 per cent as oil prices fell, with Suncor Energy Inc. declining 3.8 per cent to $41.24.
In an interview with Reuters on Thursday, U.S. President Donald Trump spoke favorably about a potentially export-boosting border adjustment tax being pushed by Republicans in the U.S. Congress.
Investors worry that the border tax would reduce the competitiveness of Canada's oil exports.
Canada's MacDonald Dettwiler and Associates Ltd. said it would buy U.S.-based DigitalGlobe Inc. for about $3.10-billion to strengthen its position in the satellite imagery market.
Its shares tumbled 7.3 per cent to $63.96, while the industrials group declined 1.4 per cent.
The materials group, which includes precious and base metal miners and fertilizer companies, fell 1.2 per cent. Its losses were cushioned by gains for gold stocks as the metal climbed to its highest in 3-1/2 months.
Spot gold was up 0.6 per cent at $1,256.75 an ounce, having touched its highest since Nov. 11 at $1,260.10 earlier, zeroing in on the 200-day moving average. It was on track to finish the week higher for the fourth straight week.
U.S. gold futures settled up 0.55 per cent at $1,258.30.
Canada's annual inflation rate jumped to a stronger-than-expected 2.1 percent in January, its highest in more than two years.
In New York, Wall Street edged higher on Friday, with the Dow extending its streak of record-setting gains to 11 days, as increases in utilities and other safety plays outweighed declines in financials.
Major Wall Street indexes have rallied to record levels since the election of Mr. Trump as U.S. president, buoyed by promises of tax reforms, reduced regulations and increased infrastructure spending.
But with scant details so far on Mr. Trump's plans, including one announced on Thursday to bring millions of jobs back to the United States, markets have been mired in a tight daily trading range. The benchmark S&P 500 index has not registered a move of at least 1 per cent in either direction since Dec. 7.
"Until you have some clarity out of the administration, hopefully that comes in 2017, but if it gets pushed out further then investors may lose a little bit of patience," said Brant Houston, managing director at Atlantic Trust Private Wealth Management in Denver.
U.S. Treasury Secretary Steven Mnuchin said on Thursday that any policy steps would probably have only a limited impact this year. Investors will look for more clarity on Trump's plan on Tuesday, when he addresses a joint session of Congress.
The Dow Jones Industrial Average rose 9.11 points, or 0.04 per cent, to 20,819.43, the S&P 500 gained 3.37 points, or 0.14 per cent, to 2,367.18 and the Nasdaq Composite added 9.80 points, or 0.17 per cent, to 5,845.31.
The energy sector, down 0.9 per cent, tracked a decline in oil prices as worries about rising U.S. supplies outweighed OPEC pledges to boost compliance with output curbs.
Shares of Hewlett Packard Enterprise fell 6.9 per cent to $22.96 after the company cut its full-year profit forecast.
Oil prices fell about 1 per cent on Friday as worries about rising U.S. supplies outweighed OPEC pledges to boost compliance with output curbs.
But crude prices were on track for a weekly rise as traders have begun to pull out barrels from pricey storage, with physical markets showing signs of tightening.
U.S. drillers added oil rigs for a sixth consecutive week, extending a nine-month recovery, energy services firm Baker Hughes Inc said.
Prices were also pressured by book squaring ahead of the weekend and upcoming Feb. 28 expirations in Brent futures for April delivery, heating oil for March delivery, and March RBOB gasoline, analysts and traders said.
Brent crude oil settled down 59 cents, or 1.04 per cent, at $55.99 a barrel, while U.S. West Texas Intermediate ended the session 46 cents lower at $53.99 a barrel.
However, both benchmarks notched a weekly gain of about 1.1 per cent.
"The oil market remains focused on the global rebalancing act, with attention centered on OPEC compliance and U.S. production growth," said Michael Tran, director of energy strategy at RBC Capital Markets in New York.
"The push-pull situation between stock draws relative to price-elastic U.S. shale remains paramount to the rebalance."
Prices tumbled over the last two sessions after government data showed U.S. crude inventories rose for a seventh straight week. But they have been supported within a tight $4 to $5 range since November, when the Organization of the Petroleum Exporting Countries (OPEC) and other producers agreed to cut production.
OPEC's record compliance with the deal has surprised the market, and the biggest laggards, the United Arab Emirates and Iraq, have pledged to catch up with their targets.
The International Energy Agency put OPEC's average compliance at a record 90 percent in January, and based on a Reuters average of production surveys, it stands at 88 percent.
However, exports from the United States, which is not part of the deal, hit a record high of 1.2 million barrels per day (bpd) last week and production rose to above 9 million bpd, the highest since April, the U.S. Energy Administration Agency said.
The surge in U.S. exports is opportunistic, said Sandy Fielden, director of oil and products research at Morningstar.
Traders were draining the priciest U.S. storage tanks and selling oil held in tankers due to rising prices of oil for near-term delivery.
Analysts at LBBW cut their year-end Brent price forecast by $5 to $55 a barrel, citing U.S. production growth and technical factors.
"Most market participants realize that the good news from OPEC seems to be priced in," said LBBW oil analyst Frank Klumpp.