The S&P/TSX Composite Index closed down 57.60 points, or 0.37 per cent, at 15,412.70 as marijuana stocks fell sharply amid concerns about the sector’s high valuation.
Cannabis companies led a 7.5-per-cent drop in health care stocks. Aurora Cannabis Inc. fell 12.2 per cent, while Canopy Growth Co. was off 11.2 per cent and Aphria was off 13.8 per cent.
Materials stocks were off 1 per cent with Kinross Gold down 4.7 per cent, Iamgold was off 3.5 per cent, and West Fraser Timer was off 3.1 per cent.
The tech sector was up 2.8 per cent. Shopify rose 5.9 per cent, Constellation Software was up 2.4 per cent and Open Text gained 1.1 per cent. Industrial stocks gained 0.8 per cent.
The energy sector dropped 0.04 per cent. Oil slipped below US$80 a barrel as Saudi Arabia pledged to raise its crude production to a record, two weeks before U.S. sanctions potentially choke off Iranian crude supplies.
LNG Canada challenged competing U.S. liquefied natural gas (LNG) projects, saying many could end up “dead in the water” as long as China keeps its tariff on U.S. imports of the fuel as part of the trade war between the countries.
Latest domestic economic data showed wholesale trade edged down by 0.1 per cent in August from prior month, as weaker sales in the building material and supplies and motor vehicles and parts subsectors led the decline, Statistics Canada said on Monday.
The S&P 500 and Dow slipped in choppy trading on Monday following losses in energy and financial stocks, and as caution grew ahead of a slew of earnings this week.
The Dow Jones Industrial Average fell 126.86 points, or 0.5 per cent, to 25,317.48, the S&P 500 lost 11.9 points, or 0.43 per cent, to 2,755.88 and the Nasdaq Composite added 19.60 points, or 0.26 per cent, to 7,468.63.
In the U.S., helping the Nasdaq and limiting losses on the S&P 500 were gains in technology stocks. The beaten-down technology index was up 1 per cent.
Microsoft gained 1.1 per cent and Intel, with help from a Nomura upgrade, jumped 2.5 per cent at the start of a big week for technology earnings.
Amazon and Alphabet also rose between 0.5 per cent and 1.6 per cent. Both are due to report results later this week, while Facebook and Apple, reporting next week, gained about 0.6 per cent and 0.9 per cent.
Energy stocks sank 1 per cent, weighed down by lower crude oil prices and Halliburton’s warning that fourth-quarter earnings would miss estimates amid ongoing weakness in the North American hydraulic fracturing market.
Halliburton fell 2.9 per cent and rival oilfield services provider Schlumberger was down 2.9 per cent.
Alan Lancz president, Alan B. Lancz & Associates Inc, an investment advisory firm, based in Toledo, Ohio, thinks the market will be more volatile and investors will lean toward being more cautious in the near term, especially if corporate results are weaker than expected.
“It’s going be a cautious situation. Revenues have been a little bit disappointing, and because of that you don’t have what we’ve had the past few earnings reporting cycles and that’s that enthusiasm. People are looking at the negatives and saying that it’s a situation where there are more headwinds,” he said.
The Dow swung between gains and losses of more than 100 points earlier in the session, highlighting the volatility in U.S. equities as they struggle to recover from a recent selloff even as the earnings season gathers steam.
Financial stocks fell 2 per cent, with the U.S. Treasury yield curve flattened to its lowest level in more than two weeks.
While profits of S&P 500 companies are expected to have jumped nearly 22 percent in the third quarter, according to Refinitiv data, the outlook for future growth due to concerns over trade, rising costs and other factors.
Earlier in the session, a surge in China stocks and positive sentiment across Europe on Moody’s decision to keep Italy’s sovereign rating outlook stable helped to support stocks.
But the gains petered out, with analysts saying that news from neither China nor Italy was enough for the Wall Street to hold its levels.
After rising as much as 0.7 per cent earlier in the day, European stocks ended lower as relief over Moody’s decision to keep Italy’s sovereign rating outlook stable was short-lived and the focus turned to Europe’s response to Rome’s budget plans.
Asian stocks rose after China promised to stabilize its economy and offset the impact of U.S. tariffs.
In China, Shanghai blue chips gained 4.3 per cent in their biggest one-day gain since November 2015, after Beijing promised stimulus support for stock markets in the world’s second-largest economy.
Reuters and The Associated Press