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Wall Street indexes were down on Tuesday though they pulled back from the day’s lows after investors fled to safety on worries about a global slowdown in growth while oil tumbled and pressure mounted on Saudi Arabia over the death of journalist Jamal Khashoggi.

Benchmark U.S. Treasury prices rose, sending yields to their lowest levels in almost three weeks as tumbling equity markets worldwide fed demand for low-risk debt.

The flight to safety, which started in Asia and continued through Europe’s trading day, also put pressure on the U.S. dollar as the safe-haven Japanese yen and Swiss franc were in favor.

Oil prices fell as much as 5 per cent after Saudi Arabia said it could supply more crude quickly if needed, reassuring investors ahead of U.S. sanctions on Iran’s crude exports that start next month.

On top of geopolitical worries and Nov. 6 U.S. congressional midterm elections, Oliver Pursche, chief market strategist, Bruderman Asset Management, New York, cited an uncertain growth outlook amid a U.S.-China trade war.

“There’s the question of impact on global growth from tariffs and the ongoing trade war. President Trump and President Xi have agreed to meet during the G-20 summit, but that’s post-election. It’s clear that nothing is going to happen for three to four weeks,” said Pursche.

But after hitting a session low of 2691.43 around 10:20 a.m. ET, the S&P gradually pared losses, though trading was volatile for much of the day.

The Dow Jones Industrial Average fell 125.98 points, or 0.5 per cent, to 25,191.43, the S&P 500 lost 15.19 points, or 0.55 per cent, to 2,740.69 and the Nasdaq Composite dropped 31.09 points, or 0.42 per cent, to 7,437.54.

Of the S&P 500’s 11 major sectors, energy was the biggest percentage decliner, last down 2.7 per cent due to the tumble in oil futures.

In Toronto, the S&P/TSX composite index closed down 0.88 per cent, or 135.33 points, at 15,277.37.

Energy stocks lost 2.4 per cent as oil slipped. Crescent Point Energy Corp. dipped 7.2 per cent, while Encana Corp. fell 5.2 per cent. Suncor Energy Inc. declined 2.7 per cent.

U.S. crude fell 4.05 per cent to $66.55 per barrel and Brent was last at $76.63, down 4.01 per cent on the day.

Marijuana producers pushed health care stocks lower. Aurora Cannabis Inc. fell 11.7 per cent, while Canopy Growth Corp. was down 1.5 per cent. Aphria Inc. reversed early losses and finished 0.7 per cent higher.

Leading the index were West Fraser Timber Co Ltd, up 6.5 per cent, Alamos Gold Inc, up 6.1 per cent, and B2Gold Corp, higher by 3.8 per cent.

Lagging shares included Trican Well Service Ltd, down 7.6 per cent, and Crescent Point Energy Corp, lower by 7.2 per cent.

Investors were anxious about the economic ramifications of Saudi Arabia’s isolation after Turkish President Tayyip Erdogan said intelligence and security institutions have evidence Khashoggi’s death at a Saudi consulate in Istanbul this month was planned. He dismissed attempts by Riyadh to blame the “savage” killing on rogue operatives.

U.S. President Donald Trump had said Monday he was not satisfied with what he heard from Saudi Arabia about the death but did not want to lose investment from Riyadh.

Benchmark 10-year notes last rose 8/32 in price to yield 3.1638 per cent, from 3.194 per cent late on Monday.

The dollar index fell 0.09 percent, with the euro up 0.08 per cent to $1.1472.

The Japanese yen strengthened 0.33 per cent versus the greenback at 112.46 per dollar, while sterling was last trading at $1.2988, up 0.21 percent on the day.

Spot gold added 0.7 per cent to $1,230.51 an ounce after hitting its highest level since mid-July as investors looked for safety.

Emerging market stocks lost 2.05 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 2.18 percent lower, while Japan’s Nikkei lost 2.67 per cent.


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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 14/05/24 4:00pm EDT.

SymbolName% changeLast
Crescent Point Energy Corp
Suncor Energy Inc
Canopy Growth Corp
Aurora Cannabis Inc

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