Stocks Start Friday in Loss Position
Canada's main stock index fell on Friday, with energy stocks in lead after oil prices fell sharply towards $78 a barrel as a fresh surge in COVID-19 cases in Europe threatened to slow the economic recovery.
The S&P/TSX Composite fell 55.88 points to open the week’s last session at 21,581.66.
The Canadian dollar dealt off 0.18 cents at 79.16 cents U.S.
RBC raised the target price on George Weston Ltd. to $162.00 from $154.00. Weston shares picked up 29 cents to $141.27.
Acumen Capital cuts the rating on Goodfood Market to hold from buy. Goodfood shares docked 29 cents, or 5.9%, to $4.51.
Scotiabank raised the rating on Imperial Oil to outperform from sector perform. Imperial shares fell $1.35, or 3.1%, to $42.52.
Scotiabank raised the target price on Metro Inc. to $73.00 from $70.00. The grocer’s shares squeaked ahead six cents to $63.77.
On the economic slate, Statistics Canada reported retail sales were down 0.6% to $56.6 billion in September. The decline was led by lower sales at motor vehicle and parts dealers (-1.6%) as new car dealer sales (-2.8%) continued to struggle amid global supply shortages for semiconductor chips.
The agency’s new housing price index increased 0.9% in October nationally, slightly higher than the rise observed over the past four months
Prime Minister Justin Trudeau returns to Ottawa on Friday after failing to convince President Joe Biden to scrap proposed electric-vehicle tax credits that would favour U.S.-based manufacturers, but said he would keep seeking a solution.
The TSX Venture Exchange inched up 3.7 points to 985.18
Seven of the 12 TSX subgroups gained ground, as information technology rocketed 1.5%, real-estate advanced 0.5%, and utilities picked up 0.2%.
The five laggards were weighed most by energy, tumbling 3.6%, financials, down 0.8%, and consumer discretionaries, off 0.4%.
The Dow Jones Industrial Average and S&P 500 were under pressure Friday, as concern over a Covid-19 resurgence weighed on global markets.
The blue-chip index staggered 265.17 points to begin Friday at 35,605.78,
The much-broader index slid 6.77 points to 4,697.77
The NASDAQ Composite acquired 61.37 points to 16,055.08.
Markets took a hit after Austria announced earlier in the day that it would re-enter a full national lockdown due to a spike in COVID cases. Germany also unveiled Thursday more restrictions for unvaccinated people, as a fourth wave sent daily cases to a record high.
Shares of air carriers were also lower as investors worried about the Austrian lockdown’s potential effects. United Airlines fell nearly 4% while Delta and American fell more than 1%. Other travel stocks dropped too, with Expedia and Booking Holdings down 2% and Airbnb losing nearly 5%. Cruise lines were about 3% lower.
The decline in airline and travel stocks comes about a week after the Biden administration lifted pandemic travel restrictions that have barred many international visitors for nearly 20 months. That move was cheered by airlines and other travel companies.
But the increase in COVID cases and new restrictions in Europe is damping hopes for an immediate rebound in trans-Atlantic travel, a usually lucrative segment that is key to large carriers’ return to profitability.
Big energy companies were mostly lower as concerns about energy demand related to new lockdown orders hurt oil prices, which were already in a slump. Hess and Diamondback Energy led the declines, falling 6% Friday. Occidental Petroleum and Devon Energy fell 5%.
Meanwhile, stay-at-home stocks moved higher. Zoom and Meta Platforms gained about 2%, while Peloton added more than 1%.
Friday’s moves took place as the market rally appeared to have stalled this week near record levels.
So far this week, the blue chip Dow is down 0.6%, on pace for its second negative week in a row. The S&P 500 and the tech-heavy NASDAQ Composite are headed for modest gains, up 0.5% and 0.8% this week, respectively. The S&P 500 is on track for it sixth positive week in seven, sitting 0.3% below its all-time high.
Those weekly moves come despite major retailers reporting strong quarterly earnings. Macy’s and Kohl’s both blew past analyst estimates in their quarterly reports released Thursday.
Intuit also posted stronger-than-expected results, sending its shares soaring by more than 11%. The TurboTax developer also raised its full-year revenue guidance. Nvidia continued its strong run, with shares rising 2.5% on continued momentum from its earnings beat earlier this week.
More than 90% of the S&P 500 companies have handed in their financial results for the third quarter, and over 80% of them reported earnings better than Street’s expectations. S&P 500 companies are on track to grow profit by 41.5% year over year.
Prices for 10-year Treasurys jumped, lowering yields to 1.52% from Thursday’s 1.59%. Treasury prices and yields move in opposite directions.
Oil prices hurtled lower $2.11 to $76.90 U.S. a barrel.
Gold prices gained $3.10 to $1,864.50 U.S. an ounce.