TORONTO — Canada's main stock index was down at the market close on Wednesday, driven by drops in industrials and energy stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was down 73.15 points at 20,366.72.
“We're seeing a slowdown in growth in the U.S. marketplace and globally and some of the economically sensitive parts of the market are trading that way. Energy would be one of those,” said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.
“If there is a slowdown in the economy, obviously there is less need for oil consumption ... so that results in the energy price going lower. It's not always a straight line, but I think that's really kind of what's driving the action.”
He also pointed to a decline in industrial stocks following “concerning reports in the last couple of days,” including by CN Rail on Monday regarding a potential slowdown.
Transportation and shipping company TFI International Inc. — “a very economically sensitive stock” — also reported weaker earnings late Tuesday as it highlighted concerns around the freight environment.
In New York, the Dow Jones industrial average was down 228.96 points at 33,301.87. The S&P 500 index was down 15.64 points at 4,055.99, while the Nasdaq composite was up 55.19 points at 11,854.35.
“The banking crisis in the U.S. doesn't want to go away yet,” said Archibald, who highlighted regional U.S. bank First Republic Bank’s stock plunge on Wednesday.
“While it probably isn't a significant concern for banks in general, it certainly is a bit of a sticking point for the broader market here just on risk appetite.”
Meanwhile, large cap technology stocks continue to do well. Archibald pointed to Microsoft’s surge following a stronger profit report than analysts expected late Tuesday, along with Alphabet, Google’s parent company, which reported a three per cent quarterly revenue growth from last year.
“Clearly, there's still a preference right now for kind of large cap technology names,” he said.
The Canadian dollar traded for 73.39 cents US compared with 73.41 cents US on Tuesday.
The June crude contract was down US$2.77 at US$74.30 per barrel and the June natural gas contract was down 13 cents at US$2.31 per mmBTU.
The June gold contract was down US$8.50 at US$1,996.00 an ounce and the July copper contract was down less than a penny at US$3.86 a pound.
Archibald said investors will be keeping an eye on Facebook parent company Meta’s quarterly earnings following the market close on Wednesday, along with that of Waste Connections Inc. in Canada.
“We're obviously in the heart of earnings season in the U.S. and Canada right now. We've had a very quiet period in the market up until two days ago,” he said.
“You're starting to see a little bit more volatility right now. I would expect it's probably going to continue for the next couple of weeks.”
This report by The Canadian Press was first published April 26, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X, TSX:CNR, TSX:TFII, TSX:WCN)
Sammy Hudes, The Canadian Press
