Materials and energy stocks weigh on Toronto market, loonie ends lower

Canada’s main stock index closed down Wednesday as commodity prices slipped, while increased scrutiny on U.S. technology stocks helped push U.S. markets down.

The day’s market drop followed a trend of down days recently as concerns over trade wars and regulatory investigations into premier tech stocks have rattled markets, said Norman Levine, managing Director of Portfolio Management Corp. in Toronto.

“It’s generally got a negative tone to it, and it’s continuing to be led by the high-flying tech stocks for the most part.”

The S&P/TSX composite index closed down 46.24 points to 15,169.94, driven by base metals and materials as worries about Chinese growth and demand increase, said Levine.

“Metal stocks are more worried about growth in China and they need that for higher metal prices, and metal prices aren’t doing a whole lot right now, and gold is weak today as well.”

In New York, the Dow Jones industrial average closed down 9.29 points to 23,848.42. The S&P 500 index closed down 7.62 points to 2,605.00 and the Nasdaq composite index was down 59.58 points to 6,949.23.

The declines included losses from major U.S. tech stocks, with Amazon falling on reports U.S. President Donald Trump is looking to go after the company and Tesla declining on a downgraded credit rating and more concerns over its self-driving vehicles, following recent declines at Facebook and Twitter.

“The big story here is the big tech stocks trading at multiples that make no sense but they were going up purely on momentum, the wind is coming out of the sail here, and they’re looking vulnerable and bringing down the rest of the market with them,” said Levine.

The decline in stocks was felt in Canada as well, where BlackBerry Ltd. beat analyst expectations with US$233 million of revenue for the last quarter but slipped 1.38 per cent to $15.76 on the TSX.

The stock losses from particular issues at larger technology companies are, however, likely distorting the view of the overall health of market because they have so much sway over some of the indexes, said Levine.

“Indexes are going to show, especially in the US, more negative than what’s going on with the average stock.”

The Canadian dollar closed at 77.51, down 0.2 of a US cent.

The May crude contract ended down 87 cents to US$64.38 per barrel and the May natural gas contract was down two cents to US$2.69 per mmBTU.

The June gold contract closed down US$17.90 to US$1,330.00 an ounce and the May copper contract was even at US$3 a pound.