Canada’s main stock index edged lower on Wednesday, weighed down by financial stocks and ahead of a meeting between the United States and the European Union presidents that is likely to focus on trade.
At 11:57 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite index was down 6.83 points, or 0.04 per cent, at 16,383.51.
Eight of the index’s 11 major sectors were lower, as the financials sector slipped 0.3 per cent.
Boeing slipped 2.7 per cent and weighed on the Dow Jones Industrial Average index after the planemaker maintained its full-year core earnings forecast, but below Street expectations.
The industrials sector, however, rose 1.7 per cent, boosted by a 3.4-per-cent rise in shares of Canadian National Railway Co. after the company reported a better-than-expected quarterly profit.
Industrials were also boosted by a 11.7-per-cent rise in shares of Toromont Industries, which also reported quarterly results.
Disappointing earnings reports from Boeing, General Motors and AT&T weighed on Wall Street’s main indexes on Wednesday, though a slight uptick in health and tech stocks helped keep the S&P 500 at one-month highs.
GM, Coca-Cola and other companies said the ongoing tariff disputes would hurt results, keeping investors squarely focused on trade tensions ahead of a meeting between U.S. and European Commission presidents.
Boeing slipped 2.7 per cent and weighed on the Dow Jones Industrial Average index after the planemaker maintained its full-year core earnings forecast, but below Street expectations. (Full Story)
General Motors fell 7 per cent after the automaker cut its 2018 profit forecast, citing rising steel and aluminum costs due to tariffs. Ford dipped 3.8 per cent ahead of results after the bell.
AT&T fell 4.1 per cent and pressured the S&P 500 after the company’s quarterly revenue missed estimates.
The U.S. wireless carrier also weighed on the S&P Telecom services, which fell 2.21 per cent, the most among the 11 major S&P sectors. Six of the 11 sectors were lower.
However the high-growth technology sector helped support the market, with Microsoft up 1.3 per cent and as Alphabet rose 0.4 per cent.
Shares of Facebook rose as much as 0.9 per cent to a record high of $216.61, while Visa climbed 0.8 per cent. Both companies are set to post earnings after markets close.
“Technology is relatively insulated from the trade war and that is why you see the sector do so well this year,” said Lamar Villere, portfolio manager at Villere & Co in New Orleans, Louisiana.
“Anybody who is concerned about the tariffs will find that it is a good place to hide.”
European Commission President Jean-Claude Juncker is due to meet U.S. President Donald Trump for trade talks. Trade Commissioner Cecilia Malmstrom said that the EU is preparing to slap tariffs on $20 billion of U.S. goods if Trump levies tariffs on cars imported from the bloc.
The Dow Jones Industrial Average was down 78.22 points, or 0.31 per cent, at 25,163.72, the S&P 500 was up 2.69 points, or 0.10 per cent, at 2,823.09 and the Nasdaq Composite was up 22.87 points, or 0.29 per cent, at 7,863.64.
Of the 148 S&P 500 companies that have reported earnings so far, 85.8 per cent have topped analyst expectations. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.
Coca-Cola rose 2.4 per cent after its quarterly sales and profit beat estimates.
Oil prices rose for a second day on Wednesday after government data showed U.S. crude inventories fell to the lowest since February 2015, easing worries about oversupply that have weighed on markets in recent weeks.
Brent crude futures rose 15 cents to $73.59 a barrel, a 0.2-per-cent gain.
U.S. West Texas Intermediate (WTI) crude futures rose 10 cents to $68.62 a barrel, a 0.2-per-cent gain.
Gains were limited though as data from the Energy Information Administration showed a large drawdown in less-critical West Coast crude stocks, which fell their most since December 2011.
“The market typically discounts large crude oil inventory drawdowns when they are concentrated in PADD 5 or the West Coast,” said John Kilduff, a partner at Again Capital Management in New York. “PADD 5 is just not as critical to the overall inventory situation.”
Overall, crude inventories fell by 6.1 million barrels in the week to July 20, EIA data showed, their lowest since February 2015. Analysts had expected a decrease of 2.3 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, EIA said, their lowest since November 2014.
“The decrease puts the focus once again on tightening supplies here in the U.S. and it also puts the focus on the fact that U.S. gasoline demand is going through the roof,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Gasoline stocks fell by 2.3 million barrels, EIA data showed, compared with analysts’ expectations in a Reuters poll for a 713,000-barrel drop. Meanwhile, U.S. Midwest gasoline stockpiles fell to their lowest seasonally since 2015.
Sentiment on Wednesday was also supported by an International Monetary Fund report about skyrocketing inflation in Venezuela, limiting its ability to boost oil output, said Stephen Innes, a trader at brokerage OANDA.
“Venezuelan oil production has already plummeted to a new 30-year low of 1.5 million barrels a day in June,” he said.
Reuters