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North America’s main indexes closed mostly lower on Wednesday, with the S&P 500 falling from a record high hit a day earlier as data signaled a sharp slowdown in jobs growth in July, while General Motors tracked its worst day in more than a year even while reporting a record pre-tax profit. The TSX ended with only a slight loss despite a 4.11% tumble in energy stocks as oil prices fell for a third day in a row.

Nine of the 11 S&P indexes were lower, with industrials and energy both slipping, as data showed U.S. private payrolls increased far less than expected in July, likely constrained by shortages of workers and raw materials.

The blue-chip Dow, heavily weighted toward economically-sensitive stocks, also declined.

The technology-heavy Nasdaq bucked the trend after another report showed a measure of U.S. services industry activity jumped to a record high last month, suggesting a broader economic rebound was still on track.

“The ADP employment report this morning (is a) big miss ... has people really locked in on tomorrow’s initial claims and then Friday’s non-farm payrolls report,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky. “To me that’s a big driver (of the market today).”

“Broadly, the continued evolution of COVID-19, the Delta variant over the recent weeks and months kind of re-rating of the growth outlook” has the market coming to terms with what it means for the reflation trade, and what it means to the bond market, Mayfield said.

After closing at a record high on Tuesday, the S&P/TSX Composite Index fell 36.12 points, or 0.18%, to 20,329.73. Selling was broad across sectors in Toronto as well, but financials managed a 0.38% gain and tech was up as well thanks to a 2.21% rise in Shopify shares. Sleep Country Canada Holding, the mattress maker, was the top gainer in Toronto after reporting better-than-expected quarterly results. Its shares were up 15.47%.

Oil prices fell to a two-week low on Wednesday on a surprise build in U.S. crude stockpiles, negative U.S. economic report and worries the spread of the coronavirus Delta variant will weigh on global energy demand.

Traders noted the oil price drop came despite reports of increased Mideast geopolitical tensions.

Brent futures fell $2.03, or 2.8%, to settle at $70.38 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.41, or 3.4%, to settle at $68.15.

That was the lowest close for both benchmarks since July 20.

The U.S. Energy Information Administration (EIA) said crude stockpiles rose by an unexpected 3.6 million barrels last week, while gasoline inventories fell by a bigger-than-forecast 5.3 million barrels.

“Crude prices remained heavy after the EIA crude oil inventory showed stockpiles unexpectedly rose last week,” said Edward Moya, senior market analyst at OANDA, noting “the report was mixed as gasoline stockpiles fell more than expected.”

With U.S. gasoline futures near their highest since October 2014, the gasoline crack spread - a measure of refining profit margins - closed at to its highest since hitting a record in April 2020 when WTI settled in negative territory.

Coronavirus cases worldwide surpassed 200 million on Wednesday, according to a Reuters tally, as the more-infectious Delta variant threatens areas with low vaccination rates and strains healthcare systems.

The United States and China, the world’s two biggest oil consumers, are grappling with rapidly spreading outbreaks of the highly contagious Delta variant that analysts anticipate will limit fuel demand at a time when it traditionally rises in both countries.

The World Health Organization is calling for a halt on COVID-19 vaccine boosters until at least the end of September as the gap between vaccinations in wealthy and poor countries widens.

Tensions in the Mideast Gulf, meanwhile, gave oil prices some support.

On Tuesday, three maritime security sources claimed Iranian-backed forces seized an oil product tanker off the coast of the United Arab Emirates, though Iran denied the reports.

Oman on Wednesday identified the Panama-flagged Asphalt Princess as the tanker involved in a hijacking which Britain’s maritime trade agency earlier said was over.

This is the second attack on a tanker since Friday in the region, which includes the Strait of Hormuz. Britain and the United States are also blaming Iran for the earlier incident, in which drones crashed into the vessel and killed two sailors. Iran denies the reports.

After six straight month of gains, the benchmark S&P 500 has struggled to rise in August over concerns about the pace of growth as the economy rebounded from the depths of the COVID-19-driven recession, and fears of higher inflation overshadowed a stellar corporate earnings season.

Federal Reserve Vice Chair Richard Clarida said on Wednesday the central bank should be in the position to begin raising interest rates in 2023.

Still, tech and tech-adjacent stocks such as Netflix Inc , Amazon.com Inc and Facebook Inc, which tend to perform better when interest rates are lower, outperformed the broader market.

Focus now turns to the Labor Department’s monthly jobs report on Friday.

Unofficially, the Dow Jones Industrial Average fell 323.34 points, or 0.92%, to 34,793.06, the S&P 500 lost 20.46 points, or 0.46%, to 4,402.69 and the Nasdaq Composite added 19.24 points, or 0.13%, to 14,780.53.

GM’s shares tumbled 8.19%, underscoring the uncertainty facing global automakers at a time of technological and economic disruption. Shares of rival Ford Motor Co fell.

Robinhood Markets Inc soared just over 50% as interest from star fund manager Cathie Wood and small-time traders set up the stock for a fourth session of gains after its underwhelming market debut last week.

Read more: Stocks that saw action Wednesday - and why

Reuters, Globe staff

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