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Canada’s main stock index erased early gains and sat lower on Tuesday as energy stocks slipped.

At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 13.35 points, or 0.08 per cent, at 16,266.08.

Crude prices fell Tuesday, retreating from early gains that had lifted the U.S. benchmark as high as $75 for the first time in more than three years, which prompted traders with bullish positions to book some profits ahead of the July 4 U.S. holiday.

U.S. light crude dropped 94 cents to $73.00 a barrel, after hitting $75.27, a 3-1/2-year high. Benchmark Brent crude was down 31 cents at $76.96 a barrel after briefly touching a session low of $76.67 a barrel. Early in the session, Brent traded as high as $78.55 a barrel.

The early gains came after Iran appeared to threaten to disrupt oil shipments from the Middle East Gulf if Washington pressed ahead with sanctions. U.S. crude rose above $75 a barrel for the first time since 2014.

But the market pulled back as some thought talk of supply disruptions might be overblown, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. He also said traders could be moving to liquidate bullish positions.

Pressure to liquidate may have accelerated ahead of the U.S. holiday on Wednesday, said Tariq Zahir, managing member at Tyche Capital in New York.

Traders said supply disruptions could be short lived. They noted that OPEC and allies are ramping up output, while a production facility in Canada might restarts ahead of schedule or U.S. President Donald Trump might order oil released from the Strategic Petroleum Reserve.

In Toronto, the energy sector fell 0.3 per cent. Imperial Oil Ltd. was down 1.7 per cent, while Encana Corp. dropped 1.5 per cent.

Gold prices recovered from a nearly seven-month low as dollar eased and Asian shares sank amid heightening trade friction between the United States and major economies.

The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.8 per cent as gold futures rose.

Barrick Gold Corp. rose 2.6 per cent, while Goldcorp Inc. was up 2.1 per cent.

Facebook dropped 1.9 per cent after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.

The social media company’s stock weighed on the S&P technology sector, which fell 0.37 per cent.

Nine of the 11 main S&P 500 sectors were higher, led by a 0.88-per-cent jump in the energy sector. Energy stocks held on to their gains even though crude oil prices reversed course shortly after the market opened as traders booked profits.

Trade tensions continued to fester, with President Donald Trump on Monday warning the World Trade Organization of “doing something” if United States is not treated properly.

Also looming is a July 6 deadline when Washington is set to impose tariffs on $34-billion worth of Chinese goods.

“In the short term, company fundamentals are quite solid and the economy is strong,” said Brant Houston, managing director at CIBC Private Wealth Management.

“But with the trade war looming there is a lot of uncertainty and a lot of unknowns, until we get more clarity there it is difficult for investors to jump back into the equity market.”

Shares of American Airlines, United Continental and Delta Air Lines fell between 1.2 and 2.2 per cent after Deutsche Bank downgraded all three stocks saying the growing U.S.-China trade dispute could weigh on their results.

The Dow Jones Industrial Average was up 32.94 points, or 0.14 per cent, at 24,340.12, the S&P 500 was up 3.42 points, or 0.13 per cent, at 2,730.13 and the Nasdaq Composite was down 2.80 points, or 0.04 per cent, at 7,564.88.

The stock market will close at 1 p.m. ET, ahead of the Fourth of July holiday, and trading volumes are expected to be light.

Tesla fell 5.1 per cent, declining for the second straight session on questions over whether it could sustain the pace of making its Model 3 cars.

Economic data was mixed. New orders for U.S.-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector, but business spending on equipment continued to show signs of slowing.

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 17/05/24 3:34pm EDT.

SymbolName% changeLast
IMO-T
Imperial Oil
+0.99%95.24
ABX-T
Barrick Gold Corp
+2.06%24.33
G-T
Augusta Gold Corp
+2.94%1.05

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