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Canada’s main stock index on Friday fell to its lowest level in nearly four weeks as investors showed reluctance to buy stocks during a seasonally weak period for the market and awaited the outcome of a federal election. U.S. stocks were also lower in a broad selloff.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 111.74 points, or 0.5%, at 20,490.36, its lowest closing level since Aug. 23.

For the week, the index was down 0.7%, extending its pullback from a record high earlier this month.

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“I think a lot of Canadians are looking to the election on Monday,” said Allan Small, senior investment adviser of the Allan Small Financial Group with iA Private Wealth.

Equities investors are casting a nervous eye over some of the campaign promises made by Canadian political parties, including Prime Minister Justin Trudeau’s vow to raise corporate taxes on the most profitable banks and insurers to help pay for the cost of the economic recovery and his pledge to immediately cap oil and gas emissions.

The financial services sector, which accounts for about 30% of the TSX’s valuation, fell 1%. Energy was down nearly 2% and the materials group, which includes precious and base metals miners and fertilizer companies, lost 0.7% as commodity prices fell.

Oil settled 0.9% lower at $71.97 a barrel, while copper was down 0.7%.

Investors “are kind of taking a wait-and-see approach because September is normally a soft month,” Small said. “If there is no good news it seems the path of least resistance is lower.”

On Wall Street, the S&P 500 lost 0.9% and posted its second straight weekly loss. Roughly 80% of the stocks in the benchmark index fell. Technology and communication companies accounted for much of the pullback. Industrial and financial stocks also were big drags on the index. Only the index’s health care sector managed a gain.

Small-company stocks bucked the overall market slide. Bond yields rose broadly.

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Trading has been choppy throughout the week as investors weighed a mixed bag of economic data reflecting how the economy is weathering a spike in COVID-19 cases and how it might continue its recovery in the coming months. Wall Street is also looking ahead to next Wednesday, when the Federal Reserve is due to deliver its latest economic and interest rate policy update.

“We’ve seen a gradual deterioration over the course of the week, with two little up periods, but for the most part, generally a weakening (stock) market,” said Alan McKnight, chief investment officer at Regions Asset Management.

The S&P 500 fell 40.76 points to 4,432.99. Despite being down about 0.6% for the week, the index is within 2.3% of the all-time high it set Sept. 2.

The Dow Jones Industrial Average fell 166.44 points, or 0.5%, to 34,584.88, while the tech-heavy Nasdaq composite slid 137.96 points, or 0.9%, to 15,043.97.

The Russell 2000 index of smaller companies recovered from an early slide and rose 3.96 points, or 0.2%, to 2,236.87.

Bond yields rose. The yield on the 10-year Treasury rose to 1.38% from 1.33% late Thursday.

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Technology and communication stocks were the biggest weights on the market. Apple fell 1.8% and Facebook dropped 2.2%.

The weak energy prices helped pull down energy stocks. Oilfield services company Schlumberger fell 1.9%.

Health care stocks eked out gains. Lab equipment maker Thermo Fisher Scientific was a standout with a 6.5% jump after giving investors an encouraging business update. Some travel-related stocks made solid gains. Cruise line operator Carnival rose 2%, while Norwegian Cruise Line gained 2.1%.

Also influencing the market’s gyrations was “quadruple witching,” the simultaneous expiration of four kinds of options and futures contracts. The phenomenon happens four times a year and forces traders to tie up loose ends in contracts they hold. More than 750 billion single stock options were due to mature Friday, said McKnight.

“Just the sheer size of that plays into this,” he said. “It creates more volume in the market and some of the volatility associated with that.”

Much of this week’s economic data pointed to an economy struggling to move forward in the last few months. Inflation remains a concern for businesses, which are dealing with supply chain problems and facing higher costs. Concerns about the highly contagious delta variant also have analysts worried that consumer spending, a key piece of economic growth, could stall.

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Investors will have their eye on the Fed next week to see whether the central bank takes any action to address the impact of rising prices on businesses and consumers. The Fed has said higher costs for raw materials and consumer goods will likely remain temporary as the economy recovers, but analysts are concerned that the higher prices could stick around and dent companies’ bottom lines while also crimping spending.

Reuters, Associated Press

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