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Canada’s main stock index slipped on Wednesday as a resurgent U.S. dollar pressured commodities and emerging markets, with investors weighing the impact of Turkey’s currency crisis.

At 11:30 a.m. ET , the Toronto Stock Exchange’s S&P/TSX Composite index .GSPTSE was down 202.85 points, or 1.24 per cent, at 16,127.18.

All but one of the index’s 11 major sectors were lower, amid broad based declines across the board.

The energy sector dropped 2.9 per cent on a weakening global economic growth outlook and a report of rising U.S. crude inventories.

The financials sector slipped 0.5 per cent. The industrials sector fell 0.6 per cent.

The materials sector, which includes precious and base metals miners, lost 4.5 per cent as gold prices fell to a more than 18-month low and industrial metal prices tumbled.

The healthcare sector rose 8.8 per cent, boosted by shares of Canopy Growth Corp, which jumped 24.2 per cent after Corona beer maker Constellation Brands said it would invest a further $4-billion in the cannabis producer.

The three main U.S. stock indexes slid more than 1 per cent on Wednesday in a broad decline over concerns about the strengthening dollar, Turkey’s currency crisis and United States’ trade relations with its partners.

Nine of the 11 major S&P sectors were lower, with energy and metal and mining companies hit by rising commodity prices. While trade-sensitive companies such as Boeing and Caterpillar fell, even the usually trade-agnostic technology stocks dropped.

The dollar index hovered near a 13-month high, also bumped by strong U.S. retail sales. U.S. crude oil prices slid nearly 4 per cent, while metal prices fell on the greenback’s strength, which also hits the overseas income of U.S. multinationals.

“The rise of the dollar is causing the investors to take a risk-off trade right now,” said Jeff Carbone, managing partner for Cornerstone Wealth in Charlotte, NC.

“Investors are looking at short-term concerns such as Turkey, tariffs and overlooking longer term opportunity that is taxes, strong earnings and economic data.”

Turkey doubled tariffs on some U.S. imports in retaliation to U.S. moves, while Beijing lodged a complaint with the World Trade Organization to help determine the legality of U.S. tariff and subsidy policies.

MSCI’s widely tracked 24-country emerging market stocks index entered a technical bear market, as fresh selling took its drop since late January to 20 per cent.

The S&P energy sector tumbled 3.51 per cent and the materials sector slid 2.49 per cent. The industrial sector fell 1.55 per cent, with Caterpillar slumping 3.3 per cent and Boeing declining 2.5 per cent.

The technology sector fell 1.55 per cent. Only the defensive utilities and real estate sectors were posting gains.

“It’s more about where people are finding their safety net and right now it’s in utilities and not technology stocks, which is bit more of risk-on,” said Carbone.

The Dow Jones Industrial Average was down 302.28 points, or 1.19 per cent, at 24,997.64, the S&P 500 was down 33.84 points, or 1.19 per cent, at 2,806.12 and the Nasdaq Composite was down 126.64 points, or 1.61 per cent, at 7,744.25.

The high-flying FAANG stocks – Facebook, Apple , Amazon, Netflix and Google-parent Alphabet – fell between 0.4 per cent and 4 per cent.

Macy’s sank 12.1 per cent on concerns over the company’s gross margin forecast for the fall season.

The forecast dragged down other retailers. The S&P 500 retailers index slid 1.77 per cent despite data showing U.S. retail sales rose more than expected in July.

Nordstrom and JC Penney, both of which report results on Thursday, fell 5.5 per cent and 8 per cent, respectively. Walmart, which also reports on Thursday, dipped 0.9 percent.

Retailers make up the majority of the S&P 500 companies yet to report results. Of the 460 companies that have reported, 79.1 per cent have beaten analysts’ estimates, according to Thomson Reuters I/B/E/S.

Tesla fell 3.9 per cent after Fox News tweeted that the U.S. Securities and Exchange Commission had subpoenaed the company over its go-private plans and CEO Elon Musk’s statement on funding the plan.

Oil futures fell more than $2 a barrel on Wednesday after data showed U.S. crude stockpiles jumped last week, compounding worries about a weaker global economic growth outlook.

Brent crude futures were down $1.96 a barrel at $70.50 a barrel. The contract earlier touched $70.40 a barrel. U.S. crude futures fell $2.22 to $64.82 a barrel.

U.S. crude inventories rose unexpectedly last week , climbing 6.8 million barrels in spite of refinery crude runs hitting a record high, the Energy Information Administration’s data showed. Crude stocks at the Cushing, Okla., delivery hub for U.S. crude futures rose 1.6 million barrels.

Analysts polled by Reuters had expected a weekly decline in U.S. crude stocks.

“Crude oil processing increased sharply and reached a record level of almost 18 million barrels per day last week,” said Carsten Fritsch, senior commodities analyst at Commerzbank. “But this was not enough to prevent the inventory build. Or take it this way; it prevented an even larger build.”

“Adding to the weakening price backdrop are signs that a deepening trade spat between the United States and China is undermining oil demand.”

Investors are concerned about the world economy as trade disputes between escalate between the United States and its major trading partners.

Reuters

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 24/05/24 6:40pm EDT.

SymbolName% changeLast
STZ-N
Constellation Brands Inc
+1.38%248.51
AAPL-Q
Apple Inc
+1.66%189.98
WEED-T
Canopy Growth Corp
+0.72%12.61
JWN-N
Nordstrom
+0.84%21.52

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