Canada’s main stock index dipped on Friday, mirroring a slump in global stocks as anxiety over corporate profits added to fears about global trade and economic growth.
The Toronto Stock Exchange’s S&P/TSX composite index lost 35.82 points, or 0.24 per cent, at 14,888.26. The main index suffered its biggest weekly decline since market rout in early February.
Losses on the TSX were led by a 0.5-per-cent drop in financial stocks. Manulife Financial Corp. was down 1.5 per cent, while Sun Life Financial Inc. declined 1 per cent.
Marijuana producers led a 2.2-per-cent decline in health care stocks. Aphria Inc. fell 4.75 per cent, while Aurora Cannabis Inc. dipped 3.9 per cent.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 1.1 per cent. First Quantum Minerals gained 7 per cent, while Goldcorp Inc. jumped 4.4 per cent.
Lagging shares included Canfor Corp, down 7.1 per cent, Bombardier Inc, down 6.6 per cent, and Eldorado Gold Corp, lower by 5.8 per cent
The Canadian dollar slumped to a six-week low against its U.S. counterpart on Friday before paring its decline, as a sell-off in global stock markets offset the boost the loonie got earlier in the week from a Bank of Canada interest rate hike.
Stock markets around the world fell as better-than-expected U.S. economic data did little to ease anxiety over disappointing corporate profits and trade wars.
Canada runs a current account deficit and exports many commodities, so its economy could suffer if the flow of trade or capital slows.
“It has been quite choppy,” said Andrew Kelvin, senior rates strategist at TD Securities. “This very negative sentiment around equities combined with the fact that you’ve had this hawkish surprise from the Bank of Canada, it creates counteracting influences on Canadian fixed income and on the currency.”
Canada’s central bank on Wednesday raised its key interest rate by 25 basis points to 1.75 per cent, its fifth hike since July 2017, and said it might speed up the pace of future hikes given that the economy was running at almost full capacity and did not need any stimulus.
The Canadian dollar was trading 0.1 per cent lower at 1.3082 to the greenback, or 76.44 U.S. cents. The currency touched its weakest intraday level since Sept. 11 at 1.3160.
For the week, the loonie was up 0.1 per cent.
Stocks are back in the red for the year after another wave of selling hit Wall Street Friday.
The latest plunge came at the end of an unusually turbulent week of trading that had one huge gain sandwiched between massive losses.
A three-week slide has left the benchmark S&P 500 index on track for its worst month since February 2009, right before the stock market hit bottom following the 2008 financial crisis.
Longtime market favourites like Amazon led the way lower after reporting weak results. Technology and consumer-focused companies accounted for much of the sell-off.
Media and communications stocks, banks and health care companies also took heavy losses. Bond prices rose, sending yields lower, as investors sought out less risky assets.
The Dow Jones Industrial Average fell nearly 300 points and the S&P 500, a benchmark for many index funds, is now down 9.3 per cent from its September peak. That’s just shy of what Wall Street calls a “correction,” or a drop of 10 per cent or more from a peak. The last S&P 500 correction happened in February.
The stock market has whipsawed this week, with the Dow slumping 500 points over the first two days of the week, plunging 608 on Wednesday, soaring 401 points Thursday and then plunging again on Friday. The ups and downs came during the busiest week for third-quarter company earnings.
“We’re going through this transition where, earlier in the year, the corporate earnings results were just a blowout and now they’re more mixed,” said David Lefkowitz, senior equity strategist Americas at UBS Global Wealth Management. “That’s causing some of this volatility.”
The S&P 500 index slid 46.88 points, or 1.7 per cent, to 2,658.69.
The Dow dropped 296.24 points, or 1.2 per cent, to 24,688.31. The average was briefly down 539 points.
The tech-heavy Nasdaq composite lost 151.12 points, or 2.1 per cent, to 7,167.21. The Russell 2000 index of smaller-company stocks gave up 16.58 points, or 1.1 per cent, to 1,483.82. The S&P 500 and Dow are now down for the year again.
Stock trading turned volatile in October after a placid summer, with big sell-offs in the sectors that have powered the bulk of the gains during the market’s long bull run.
Disappointing quarterly results and outlooks have stoked investors’ jitters over future growth in corporate profits, a key driver of the stock market.
Traders are worried that rising interest rates and the escalating U.S.-China trading dispute could hurt the economy and dampen corporate earnings growth.
“There’s still uncertainty facing equity investors,” said Gary Pollack, managing director at Deutsche Bank Wealth Management. “And the GDP report this morning showed the economy slowing down from the second quarter.”
The Commerce Department said the U.S. economy’s gross domestic product, a measure of total output of goods and services, grew at a robust annual rate of 3.5 per cent in the July-September quarter. That’s higher than what many economists had been projecting, but lower than the 4.2 per cent rate of growth in the second quarter.
While a sharp increase in personal consumption helped boost the overall GDP reading, there was also an increase in business inventories during the quarter. That could mean that companies may pull back on beefing up their stockpiles in the fourth quarter, Pollack said.
Amazon and Google parent company Alphabet slumped after both companies reported quarterly reported revenue figures that fell short of analysts’ estimates. Amazon sank 7.8 per cent to $1,642.81 while Alphabet fell 1.8 per cent to $1,083.75.
Mattel dropped 2.8 per cent to $13.45 after the toy maker served up quarterly results that fell short of analysts’ forecasts.
Colgate-Palmolive lost 6.6 per cent to $59.58 after the maker of consumer products didn’t earn as much revenue in the latest quarter as analysts expected.
In a bright spot, chipmaker Intel gained 3.1 per cent to $45.69 after it reported strong quarterly results and raised its outlook.
U.S. bond prices rose. The yield on the 10-year Treasury note fell to 3.08 per cent from 3.13 per cent late Thursday.
Benchmark U.S. crude rose 0.4 per cent to settle at $67.59 a barrel in New York. Brent crude, the benchmark for international oil prices, added 0.9 per cent to close at $77.62 a barrel in London.
Wholesale gasoline gained 0.1 per cent to $1.82 a gallon. Heating oil jumped 1.1 per cent to $2.30 a gallon and natural gas fell 0.5 per cent to $3.19 per 1,000 cubic feet.
The dollar fell to 111.85 yen from 112.61 yen on Thursday. The euro rose to $1.1412 from $1.1359.
Gold rose 0.3 per cent to $1,235.80 an ounce. Silver gained 0.5 per cent to $14.70 an ounce. Copper dipped 0.5 per cent to $2.74 a pound.
Major European stock indexes fell. Germany’s DAX slipped 0.9 per cent, while France’s CAC 40 dropped 1.3 per cent. Britain’s FTSE 100 slid 0.9 per cent. In Asia, Japan’s benchmark Nikkei 225 lost 0.4 per cent, while South Korea’s Kospi dropped 1.8 per cent. Australia’s S&P/ASX 200 was flat. Hong Kong’s Hang Seng sank 1.1 per cent.
Reuters and The Associated Press