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U.S. and Canadian stocks closed lower on Monday, slipping from last week’s record levels, as investors awaited guidance from first-quarter earnings to justify high valuations, while Tesla Inc. shares fell after a fatal car crash. Declines in Toronto were fairly broad and mild across sectors, though tech stocks tumbled by 2.81%.

The S&P/TSX Composite Index closed down 146.90 points, or 0.76%, to 19,204.42. Shopify fell just over 5%. Ottawa released its federal budget after markets closed.

On Wall Street, Tesla slid 3.4% after one of its vehicles believed to be operating without anyone in the driver’s seat crashed into a tree on Saturday north of Houston, killing two occupants. 

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The stock was the biggest drag on the S&P 500 and Nasdaq Composite Index. An 8.4% drop over the weekend in bitcoin, in which Tesla has an investment, also weighed on its share price.

The S&P 500 was mostly lower, with Microsoft Corp, Amazon.com Inc and Nvidia Corp also weighing on the benchmark index as analysts await results this week and next that form the bulk of earnings season.

Corporate outlooks should indicate to what degree the rally from last year’s lows can continue. Analysts expect first-quarter earnings to have grown 30.9% from a year ago, according to Refinitiv IBES data.

The U.S. economy is poised to boom as consumers hold US$2 trillion in savings in excess of pre-pandemic levels, said Doug Peta, chief U.S. investment strategist at BCA Research, adding markets are in pause mode.

“If indeed we do keep grinding higher that would be healthy, that would suggest that the grinding higher is sustainable,” Peta said. “The pullbacks along the way are healthy.”

Real estate was the only one of the 11 S&P 500 sectors to post gains. That same sector closed lower in Toronto.

“The market has had a huge jump to the upside so it needs to take a little bit of rest,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

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“For now it’s just a little bit of profit taking as traders await results from big tech names on Wall Street.”

The Dow Jones Industrial Average fell 123.04 points, or 0.36%, to 34,077.63. The S&P 500 lost 22.21 points, or 0.53%, at 4,163.26; while the Nasdaq Composite dropped 137.58 points, or 0.98%, to 13,914.77.

Volume on U.S. exchanges was 9.86 billion shares.

A recent retreat in benchmark 10-year Treasury yields from 14-month highs has helped high-flying technology stocks to rebound, while strong economic data has lifted the S&P 500 and the Dow to record levels.

The S&P 500 has gained the past four weeks, its longest winning streak since August 2020.

Crypto stocks including miners Riot Blockchain and Marathon Digital each fell more than 8% as bitcoin took a hammering over the weekend. Bitcoin closed down 0.7%. 

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Oil prices edged higher on Monday, supported by a weaker U.S. dollar but gains were capped by concerns about the impact on demand from rising coronavirus cases in India.

Brent crude settled up 28 cents, or 0.4%, at $67.05 a barrel, after rising 6% last week. West Texas Intermediate U.S. oil ended the session up 25 cents, or 0.4%, at $63.38 a barrel, having gained 6.4% last week.

Also see: Stocks that saw action on Monday - and why

Reuters, Globe staff

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