S&P/TSX composite down on energy weakness, U.S. stock markets mixed

S&P/TSX composite down on energy weakness, U.S. stock markets mixed
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TORONTO — Canada’s main stock index closed in the red Tuesday as energy weighed down the index, while the S&P 500 hit a record high.

“There’s a very distinct story in the markets today and that’s largely one of the divergence between the U.S. and the Canadian markets,” said Candice Bangsund, portfolio manger for Fiera Capital.

The S&P/TSX composite index fell 30.06 points to 16,626.06.

The energy sector led the decline with shares in the sector, on average, losing 1.58 per cent of their worth as the price of oil retreated. The October crude contract lost five cents to US$43.12 per barrel.

Oil prices have struggled to make notable headway beyond the US$43 mark, said Bangsund, as the ongoing COVID-19 pandemic continues to suppress the outlook for oil demand.

The Organization of the Petroleum Exporting Countries leaders are set to meet Wednesday, she added, “so the market may be in a bit of a holding pattern in anticipation of what’s to come out of that meeting.”

As well as resources, the financial sector fell Tuesday, down 0.5 per cent.

Indexes south of the border have higher exposure to growth-oriented sectors than the TSX, said Bangsund, such as the technology giants and consumer-discretionary stocks like Amazon that led Tuesday’s performance charge.

In New York, the Dow Jones industrial average shed 66.84 points to 27,778.07.

The Nasdaq composite rose 81.12 points to 11,210.84, while the S&P 500 index added 7.79 points to 3,389.78 finally cracking its previous all-time closing high of 3,386.15 set in February.

The S&P 500 also cracked its previous intraday high, also set in February, hitting a record 3,395.06 earlier in the trading day.

“Surprisingly we’re not seeing a lot of reaction to the news of Finance Minister (Bill) Morneau’s resignation,” said Bangsund.

Morneau resigned late Monday. Deputy Prime Minister Chrystia Freeland was sworn in as his replacement Tuesday afternoon.

“The one area you would thought would be most impacted would be in the currency market,” said Bangsund, “but the Canadian dollar is actually stronger on the day owing mainly to the unrelenting drop in the U.S. dollar.”

The Canadian dollar traded for 75.93 cents US compared with 75.72 cents US on Monday.

Elsewhere in commodities, the September natural gas contract added nearly eight cents to nearly US$2.42 per mmBTU. The December gold contract advanced US$14.40 to US$2,013.10 an ounce and the September copper contract gained seven cents to nearly US$2.98 a pound.

This report by The Canadian Press was first published Aug. 18, 2020.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)

The Canadian Press

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