Canada’s main stock index fell Thursday despite optimism for a revised North American Free Trade Agreement as top U.S. and Canadian trade negotiators continued for a second day of talks. Cannabis and energy stocks fell the most.
Foreign Affairs Minister Chrystia Freeland said Thursday she is looking over the work that officials from both countries did during a long night of talks to move the needle on negotiations.
On Wednesday, she sounded sanguine as she emerged from negotiations with top U.S. trade negotiator Robert Lighthizer, although she cautioned that no trade deal was done until the last issue was nailed down.
The Toronto Stock Exchange’s S&P/TSX fell 36.63 points, or 0.23 per cent, to 16,100.94.
Leading advancers on the the index were Aphria Inc., up 15.5 per cent, WSP Global Inc., up 7.3 per cent, and Alimentation Couche-Tard Inc., higher by 4.5 per cent.
Lagging shares were Pretium Resources Inc., down 10.2 per cent, Crescent Point Energy Corp., down 7.7 per cent, and Aurora Cannabis Inc., lower by 5.6 per cent.
The most heavily traded shares by volume were Aphria, Aurora Cannabis and Baytex Energy.
The TSX’s energy group was the leading decliner down 1.88 per cent, while the financials sector climbed 0.41 points, or 0.13 per cent.
West Texas Intermediate crude futures fell 1.11 per cent to US$67.96 a barrel. Brent crude fell 0.71 per cent to US$76.72.
Crescent Point Energy was down 7.8 per cent and Encana was down 3.6 per cent.
Eight of the index’s 11 major sectors were higher, with the consumer stables index up the most, at 1.4 per cent, led higher by Alimentation Couche-Tard after it reported a stronger than expected second quarter profit.
Another big drag to the main index was the health care sector, down 0.9 per cent weighed down by a decline in cannabis companies.
Aurora Cannabis Inc. fell 5.7 per cent and Canopy Growth Corp. was down 2.8 per cent.
Continental Gold Inc. declined 1.9 per cent after the miner said one engineer from its Buritica mine in Colombia was killed and another wounded in an attack early on Wednesday.
Maxar Technologies, which jumped 2.2 per cent after the U.S. government renewed a contract valued at $44-million.
The S&P 500 and Nasdaq declined on Thursday as the possibility of more U.S. tariffs on Chinese imports loomed and as tech stocks stumbled on warnings from chipmakers and concerns about increased regulation of social media companies.
The Dow Jones Industrial Average rose 20.88 points, or 0.08 per cent, to 25,995.87, the S&P 500 lost 10.55 points, or 0.37 per cent, to 2,878.05 and the Nasdaq Composite dropped 72.45 points, or 0.91 per cent, to 7,922.73.
The Philadelphia SE Semiconductor index slid 2.7 per cent after executives from Micron Technology Inc. and KLA-Tencor Corp. spoke of ongoing challenges in their segments of the chip market at a Citi conference.
Micron Chief Financial Officer David Zinsner said prices of NAND chips declined in the third quarter, while KLA-Tencor CFO Bren Higgins said his company faced a September “drought” in memory-chip shipments.
Micron shares sank 9.9 per cent and were among the biggest drags on the Nasdaq and the S&P. KLA-Tencor shares tumbled 9.7 per cent.
Fallout from the scrutiny of social media companies also continued to batter tech stocks. U.S. lawmakers suggested that legislative action may be necessary to counteract foreign efforts to influence U.S. elections and political discourse on social media after executives from Facebook Inc. and Twitter Inc. testified at a Senate Intelligence Committee hearing on Wednesday.
The same day, the U.S. Justice Department said it would meet with state attorneys general to discuss concerns that social media platforms are “intentionally stifling the free exchange of ideas.”
Facebook shares fell 2.8 per cent and Twitter shares dropped 5.9 per cent. Shares of Snap Inc., the parent company of Snapchat, touched a record low and were last down 3.1 per cent.
“Tech has gotten a free pass on a lot of things this whole cycle,” said Brad McMillan, chief investment officer of Commonwealth Financial Network, an independent broker-dealer in Waltham, Mass. “To go from being the favourite sector that’s changing the world to all of a sudden being highlighted as the bad guys, that’s a big shift.”
Trade concerns also lingered. The public comment period for proposed tariffs on an additional US$200-billion worth of Chinese imports ends on Thursday. China has warned of retaliation if Washington implements any new tariff measures.
Among bright spots, shares of CBS Corp. rose 3.2 per cent after reports that the media company’s board was in settlement talks with Chief Executive Les Moonves to negotiate his exit.