TORONTO — Losses in technology stocks helped lead Canada's main stock index lower Thursday, while U.S. stock markets were mixed as the Nasdaq was dragged down by the weakness in technology.
U.S. earnings season appears to be supporting a broadening of the rally that was already underway, said Allan Small, senior investment adviser at iA Private Wealth.
“Overall, it looks like we were seeing a bit of a rotation maybe into some of the other areas … which is a good thing for the rally, for a bull market,” he said.
“We’re seeing banks participate on the back of some strong earnings.”
The S&P/TSX composite index was down 54.30 points at 20,436.87.
In New York, the Dow Jones industrial average was up 163.97 points at 35,225.18. The S&P 500 index was down 30.85 points at 4,534.87,while the Nasdaq composite was down 294.71 points at 14,063.31.
With the big U.S. banks beating expectations last week, and some tech names disappointing this week, the Dow outperformed other indexes on Thursday as the Nasdaq fell more than two per cent.
Dragging the tech-heavy index down were a number of semiconductor companies, including Nvidia Corp., Taiwan Semiconductor Manufacturing Company Ltd., and Advanced Micro Devices Inc. Shares in TSMC were down more than five per cent after it reported disappointing earnings.
“The semis are having a tough day, and I think that’s leading the charge for the Nasdaq downward,” said Small.
Tesla and Netflix also moved lower Thursday after reporting earnings, with concerns about profitability for the electric car company. Investors may have been profit-taking on Netflix, noted Small, as the company reported stronger profits than expected. After the company’s password crackdown clearly gave it a boost, questions remain about how much further Netflix can grow, he said.
Small thinks market participation will continue to broaden as earnings season progresses, with investors eyeing the big tech names whose stocks have soared amid an artificial intelligence spree.
“Investors are going to need to hear something positive” from those companies, said Small, while he expects banks will move higher after beating expectations — albeit low ones.
Meanwhile in Canada, absent any major economic news, “everything is flat,” said Small.
The Canadian dollar traded for 75.92 cents UScompared with 75.93 cents US on Wednesday.
The September crude oil contract was up 36 cents at US$75.65 per barrel and the August natural gas contract was up 15 cents at 2.76 per mmBTU.
The August gold contract was down US$9.90 at US$1,970.90 an ounce and the September copper contract was up two cents at US$3.83 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published July 20, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
