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U.S. stocks ended sharply lower on Monday after protests in major Chinese cities against strict COVID-19 policies sparked concerns about economic growth, while Apple Inc slid on worries about a hit to iPhone production. The TSX also fell, but only about half as much as major U.S. indexes, in a mixed day of trading across sectors.

Shares of the Cupertino, California tech giant lost 2.6% and weighed heavily on the benchmark S&P 500 index as worker unrest at the world’s biggest iPhone factory in China fanned fears of a deeper hit to the already constrained production of higher-end phones.

Rare protests in major Chinese cities over the weekend against the country’s strict zero-COVID curbs are exacerbating worries about growth in the world’s second-largest economy.

“These protests are just evidence that this is a kind of a moving target where, will China continue to try to really constrain COVID’s spread?” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis. “Or will they have more of a ‘living with COVID’ approach that we’ve seen in the United States and other countries?”

“We think COVID itself and China’s policy is one of the key variables for 2023 that would influence stock prices and investors,” Hainlin said.

All 11 S&P 500 sector indexes declined, led by real estate, down 2.81%, and a 2.74% loss in energy.

By contrast, trading was more mixed on Bay Street. Tech rose nearly a percentage point as Shopify rallied 4.3% per cent after announcing a 17-per-cent year-over-year rise in Black Friday sales. Consumer staples was also a bright spot, gaining nearly 1.5%. Among other gainers was Bombardier Inc, with its shares rising nearly 7% to its highest level since November 2021.

But the resource sectors performed poorly, with energy down 1.6% and materials 2.3%. Heavily-weighted financials also lost ground, falling 1.1%, ahead of the start of bank earnings season on Tuesday.

Canada’s Big Six banks are expected to post a 4% decline in fourth-quarter profits from last year as choppy markets hurt wealth management and a slow deal pipeline dents income from investment banking.

“The wealth management business will be pressured but I expect margin increases, given higher interest rates, and solid balance sheets across the board,” said Angelo Kourkafas, investment strategist at Edward Jones Investments.

The TSX is down about 4% this year, far less than the S&P 500′s decline of 16% and the Nasdaq almost 30% dive, thanks largely to its heavy weighting in commodity sectors that tend to perform well in an inflationary environment.

Robert Kavcic, senior economist with BMO Capital Markets, said this is the biggest relative outperformance by the TSX in 17 years.

“To put it nicely, this has been a tough year; but Canadian equities have proved to be a relatively good hiding place,” Mr. Kavcic said in a note.

The S&P/TSX Composite Index Monday closed down 163.28, or 0.80%, at 20,220.49, snapping a four-day winning streak that had brought it to a 5-1/2 month high.

The S&P 500 declined 1.54% to end the session at 3,963.95 points. With two trading days left in November, the S&P 500 is on track for a gain of 2.4% for the month.

The Nasdaq Composite Index declined 1.58% to 11,049.50 points, while Dow Jones Industrial Average fell 1.45% to 33,849.46 points.

U.S. shares of Pinduoduo Inc surged 12.6% after the Chinese e-commerce platform beat estimates for third-quarter revenue, helped by COVID-related lockdowns in the country that forced consumers to shop online. U.S. shares of other Chinese technology companies also rose, with Baidu and Tencent Holdings each gaining over 2%.

Shares of Amazon.com Inc rose 0.6% after an industry report estimated spending during Cyber Monday, the biggest U.S. online shopping day, would rise to as much as $11.6 billion.

Shares of cryptocurrency and blockchain-related companies Coinbase Global Inc, Riot Blockchain Inc and Marathon Digital Holdings Inc each fell about 4% following lender BlockFi’s bankruptcy filing, the latest casualty since FTX’s collapse earlier this month.

This week, investors will keep a close watch on November U.S. consumer confidence data, due on Tuesday; the government’s second estimate for third-quarter gross domestic product, due on Wednesday; and November nonfarm payrolls due on Friday.

Declining stocks outnumbered rising ones within the S&P 500 by a 12.2-to-one ratio. The S&P 500 posted 12 new highs and two new lows; the Nasdaq recorded 93 new highs and 174 new lows. Volume on U.S. exchanges was relatively light, with 9.3 billion shares traded, compared to an average of 11.3 billion shares over the previous 20 sessions.

Reuters, Globe staff

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