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Equities
Canada’s main stock index slid at the opening bell Tuesday although rising crude prices helped put a floor under losses. South of the border, major indexes pulled back after a solid start to the month with investors easing back into stocks linked to the reopening economy.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 15.43 points, or 0.08 per cent, at 19,197.73.
The Dow Jones Industrial Average fell 33.03 points, or 0.10 per cent, at the open to 34,080.20.
The S&P 500 opened lower by 13.62 points, or 0.32 per cent, at 4,179.04, while the Nasdaq Composite dropped 120.61 points, or 0.87 per cent, to 13,774.51 at the opening bell.
“The European travel and leisure sector is outperforming,” OANDA analyst Sophie Griffiths said.
“A similar note of optimism exists surrounding the U.S. economic reopening as many states continue to ease lockdown restrictions,” she said. “Investors see the light at the end of the COVID tunnel getting bigger and brighter. As a result, investors are more prepared to buy into riskier assets, boosting stocks.”
On Tuesday, earnings continue to dominate what has been a strong reporting season so far. Of the S&P 500 companies that have reported so far, about 90 per cent have topped analysts’ forecasts, according to an early market note from Swissquote.
Pfizer Inc raised its forecast for full-year sales of the COVID-19 vaccine it co-developed with Germany’s BioNTech. The U.S. drug maker now expects full-year sales of US$26-billion from the vaccine, up from its prior forecast of about US$15-billion.
In this country, Suncor Energy reported a first-quarter profit following a loss in the prior quarter, bolstered by recovering crude prices.
Suncor posted net earnings of $821-million, or 54 cents per share, for the period, compared with a loss of $168-million, or 11 cent per share, in the quarter ended Dec. 31. The results were released after the close of trading on Monday.
Overseas, the pan-European STOXX 600 was down 1.11 per cent by afternoon. Britain’s FTSE 100 fell 0.24 per cent. Germany’s DAX and France’s CAC 40 dropped 2.12 per cent and 0.75 per cent, respectively.
In Asia, Hong Kong’s Hang Seng closed up 0.70 per cent. Markets in Japan and China were closed.
Commodities
Crude prices gained with optimism over easing COVID-19 restrictions in parts of the U.S. and Europe offsetting continued concerns over rising cases in India.
The day range on Brent is US$67.37 to US$68.37. The range on West Texas Intermediate is US$64.29 to US$65.25.
“Oil markets ignored the U.S. ISM data, preferring to concentrate on the reopening announcements from around New York and boosted by the fall of the US dollar,” OANDA senior analyst Jeffrey Halley said in a note.
“Oil may also have been encouraged by signals from the U.S. government that a U.S./Iran deal was no nearer than previously.”
In the U.S., officials announced that most capacity restrictions in New York, New Jersey and Connecticut were set to ease while the European Union also looked to open travel for more foreign visitors who have been vaccinated.
Later in the session, markets will get the first of two weekly U.S. inventory reports, with investors watching for more signs of rising demand. The American Petroleum Institute releases its report Tuesday afternoon followed by more official U.S. government numbers on Wednesday morning.
Five analysts polled by Reuters estimated on average that U.S. crude inventories fell 2.2 million barrels in the week to April 30 after rising the two previous weeks.
In other commodities, gold prices fell from two-month highs.
Spot gold was down 0.4 per cent at US$1,786.10 per ounce, after hitting its highest since Feb. 25 at US$1,797.75 on Monday.
U.S. gold futures fell 0.4 per cent to US$1,785.50.
“Given gold’s direct correlation to the direction of U.S. 10-year yields and the U.S. dollar, demonstrated in spades overnight, further gains are entirely reliant on weakness in the other two,” Mr. Halley said.
Currencies
The Canadian dollar was weaker in early going as its U.S. counterpart extended gains against a group of world currencies.
The day range on the loonie is 81.16 US cents to 81.46 US cents.
“The CAD is tracking a slightly softer profile against the USD but is holding up relatively well against its major commodity peers as domestic yields provide support, alongside generally firm commodity prices,” Shaun Osborne, chief FX strategist with Scotiabank, said.
Ahead of the opening bell, investors got the latest reading on Canada’s international trade. Statscan says Canada saw a trade deficit of $1.1-billion in March as imports rose 5.5 per cent and exports edged up 0.3 per cent. In February, Canada had a trade surplus of $1.4-billion.
On global markets, the U.S. dollar index, which weighs the greenback against a group of global currencies, rose 0.4 per cent to 91.34, just short of a near two-week high.
The greenback advanced 0.3 per cent against the yen, euro and pound in trade thinned by holidays in China and Japan, according to figures from Reuters.
More company news
ConocoPhillips says it plans to sell its Cenvous Energy shares into the open market starting in the second quarter. ConocoPhillips owns a 10-per-cent interest in the Canadian company. It acquired the stake in 2017 as partial consideration in the disposition of the company’s Foster Creek Christina Lake (FCCL) oil sands and western Canada Deep Basin natural gas assets. ConocoPhillips says it expects to complete the fourth quarter of 2022.
Industrial materials maker DuPont raised its full-year profit and revenue forecasts and breezed past first-quarter expectations on Tuesday, boosted by demand from chip companies as well as a recovery in automobile markets. DuPont said it expects net sales between US$15.70-billion and US$15.90-billion and adjusted earnings per share in the range of US$3.60 to US$3.75 for the year ended December 2021.
Under Armour Inc raised its full-year revenue forecast, as reopening markets in the United States and Asia fuel demand for the company’s sports shoes and apparel. The company said it expects full-year revenue to rise by a high-teen percentage rate, compared with a previous outlook of a high-single-digit increase.
Economic news
830 a.m. (ET) Canada merchandise trade balance for March.
830 a.m. (ET) Canada building permits for March.
830 a.m. (ET) U.S. goods and services trade deficit.
10 a.m. (ET) U.S. factory orders for March.
With Reuters and The Canadian Press
Terry Weber