North American stock indexes stumble as loonie hits 6-week high | iNFOnews | Thompson-Okanagan's News Source
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North American stock indexes stumble as loonie hits 6-week high

The TSX ticker is shown in Toronto on May 10, 2013. THE CANADIAN PRESS/Frank Gunn
Original Publication Date December 05, 2017 - 8:26 AM

TORONTO - Mining stocks and financials weighed on Canada's main stock index Tuesday as U.S. markets also fell into the red, while the Canadian dollar gained ground.

The S&P/TSX composite index was down 53.35 points to 15,915.68 in a broad-based decline that included the materials, gold and base metals sectors.

In commodities, the February gold contract fell US$12.80 to US$1,264.90 an ounce and the March copper contract was down 14 cents to US$2.95 a pound.

It was also a negative day for financial institutions, as the Bank of Montreal (TSX:BMO) wrapped up the big banks' earnings season Tuesday with a drop in profits, which were hit by reinsurance claims related to hurricanes Irma, Maria and Harvey during the quarter ended Oct. 31. The Canadian lender's net income slipped to $1.23 billion, down from $1.35 billion during the same period a year earlier.

Canada's other big banks also saw losses, including Toronto-Dominion Bank (TSX:TD), which was down 1.32 per cent, and Bank of Nova Scotia (TSX:BNS), which was down 0.59 per cent.

"The banks are all a little weak today but if you look at the operating results the banks have reported we have seen fairly strong results from the vast majority of the banks," said Colum McKinley, vice-president and portfolio manager of Canadian equities at CIBC Asset Management Inc.

"And despite some concerns people have had about the Canadian economy and about housing and the effect that would have on the Canadian banks, we've seen fairly good results out of their underlying businesses so we continue to be encouraged by the results that we see being reported."

The energy sector was the lone bright spot among major sectors on the TSX, as the price of oil recovered modestly after a sharp drop on Monday. The January crude contract advanced 15 cents to US$57.62 per barrel.

Elsewhere in commodities, the January natural gas contract retreated seven cents to US$2.91 per mmBTU.

"There is a bit of a divergence in the energy space," McKinley noted. "There continues to be a near-term challenge on getting gas to markets effectively and concerns about growing oversupply. And so we're likely to see that weigh on these stocks in the coming months and quarters."

South of the border, Wall Street fell into the red after a recovery for technology stocks lost ground. Telecom stocks, utilities and industrial companies had the market's sharpest losses.

In New York, the Dow Jones industrial average tumbled 109.41 points to 24,180.64. The S&P 500 index edged down 9.87 points to 2,629.57 and the Nasdaq composite index gave back 13.16 points to 6,762.21.

Tech stocks began stumbling last week as expectations ramped up for Washington to push through an overhaul of the tax system. Technology companies already pay some of the lowest effective tax rates of companies in the S&P 500, so they have less to gain from the proposal.

In currency markets, the Canadian dollar closed at an average trading value of 78.86 cents US, up 0.09 of a U.S. cent, ahead of Wednesday's Bank of Canada interest rate announcement.

That's the highest level for the loonie in six weeks when it closed at an average trading price of $78.95 cents US on Oct. 24.

- With a file from The Associated Press.

Note to readers: CORRECTS TSX closing numbers

News from © The Canadian Press, 2017
The Canadian Press

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