Canada's main stock index moved higher in late-morning trading, helped by gains in the financial, technology and health care sectors. People walk in Toronto's financial district in Toronto, on Oct. 29, 2012. THE CANADIAN PRESS/Nathan Denette
Republished June 10, 2019 - 2:07 PM
Original Publication Date June 10, 2019 - 8:26 AM
TORONTO - Canada's main stock index started the week lower on a drop in commodity prices while U.S. markets closed higher following U.S. President Donald Trump's decision not to impose tariffs on Mexico.
The S&P/TSX composite index closed down 14.70 points Monday to 16,216.26.
A slower pace of housing starts in May along with the price of gold falling by the most in a month and oil retreating had an effect on the Canadian market, says Anish Chopra, managing director with Portfolio Management Corp.
Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts slipped to 202,337 units in May, down 13.3 per cent from 233,410 units in April.
"Canada's got different issues, one being housing, the other being commodities. Those are two pretty big sectors that drive the Canadian economy," he said in an interview.
In New York, the Dow Jones industrial average gained for a sixth straight day, rising 78.74 points at 26,062.68. The S&P 500 index was up 13.39 points at 2,886.73, while the Nasdaq composite was up 81.07 points at 7,823.17.
Markets rose after Trump said his government reached a deal with Mexico over immigration that lead him to abandon his threat to impose tariffs on imports from Mexico.
In addition, two large mergers and acquisitions were announced Monday. Raytheon and United Technologies will join to create a massive aerospace and defence company with annual revenues of US$74 billion and software maker Salesforce is buying Tableau Software in an all-stock deal valued at US$15.7 billion.
"So there's some acquisition-related activity as well as positive trade-related activity is the big driver around what's happening in the U.S.," said Chopra.
The Canadian dollar traded at an average of 75.37 cents US compared with an average of 75.28 cents US on Friday.
Eight of the 11 major sectors on the TSX were lower, led by industrials, materials and energy.
Industrials dropped 0.73 per cent as shares of Air Canada, SNC-Lavalin and Canada's two largest railways fell, partially offset by gains for BRP Inc. and Bombardier Inc.
Materials was off by half a percentage point as Yamana Gold Inc. and Turquoise Hill Resources Ltd. were down more than four per cent.
The August gold contract was down US$16.80 at US$1,329.30 an ounce and the July copper contract was up 3.4 cents at US$2.66 a pound.
The key energy sector also fell, led by Crescent Point Energy Corp. as crude oil prices dropped.
The July crude contract was down 73 cents at US$53.26 per barrel and the July natural gas contract was up two cents at US$2.36 per mmBTU.
U.S. markets rose last week on anticipation that the Federal Reserve will cut interest rates in response to a slowing global economy.
Chopra said any action will be precipitated by data. Later this week, data about the Chinese economy, U.S. inflation and retail sales will be released.
"If the data doesn't come through as badly as markets are expecting or as poorly as markets are expecting then you won't get some of the larger rate cut amounts that are being estimated out there."
Companies in this story: (TSX:AC, TSX:SNC, TSX:CNR, TSX:CP, TSX:DOO, TSX:BBD.B, TSX:YRI, TSX:TRQ, TSX:CPG, TSX:GSPTSE, TSX:CADUSD=X)
News from © The Canadian Press, 2019