Canada’s main stock index was slightly lower on Thursday, as declines in financials and consumer cyclical companies weighed, but strong gains in energy shares that benefited from a rally in oil prices kept further losses in check.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite Index was down 13.43 points, or 0.09 per cent, at 15,515.98 after a five-day rally.
The energy sector, which accounts for nearly a fifth of the index’s weight, advanced 1.5 percent, helped by a 1.8-per-cent rise in shares of Canadian Natural Resources and other oil and gas producers.
Oil prices continued to climb to their highest since late 2014 amid a decline in U.S. crude inventories and after sources said top exporter Saudi Arabia aims to push prices even higher.
Eight of the 10 main index sectors were in the red.
The heavy weight financial sector was 0.2 per cent lower, as marginal declines in shares of big banks weighed.
U.S. stocks dropped on Thursday, weighed down by a broad-based decline in technology stocks from Apple to chipmakers as well as a tumble in consumer staples such as Philip Morris and P&G.
A warning from Taiwan Semiconductor (TSMC), the world’s largest contract chipmaker and an Apple supplier, on soft demand for smartphones and on the semiconductor industry’s growth this year sparked a tumble in chip stocks.
Apple’s shares also fell 2.3 per cent, with analysts telling Reuters that TSMC’s warning was related to the iPhone maker. Apple was the biggest drag on the Dow Jones Industrial Average and the Nasdaq.
TSMC’s U.S.-listed shares fell 6.3 per cent. Intel declined 3.1 per cent, falling the most on the Dow. All stocks on the Philadelphia SE Semiconductor index were in the red, with the index itself tumbling 3.9 per cent.
The S&P consumer staples sector declined 3.2 per cent as Philip Morris plunged 17.4 per cent after the tobacco company’s weak results and forecast.
Philip Morris was the biggest drag on the S&P and also dragged rival Altria down 7.8 percent.
Also weighing was Procter & Gamble, which dropped 2.5 per cent after the Dow component said shrinking retailer inventories and higher commodities and transportation costs squeezed its margins.
The Dow Jones Industrial Average was down 57.28 points, or 0.23 per cent, at 24,690.79, the S&P 500 was down 15.70 points, or 0.58 per cent, at 2,692.94 and the Nasdaq Composite was down 53.47 points, or 0.73 per cent, at 7,241.77.
Still, not everything was gloomy.
The financial sector was up a healthy 1.1 per cent, helped by a jump in American Express and as bank stocks bounced with 10-year Treasury yields reaching near one-month highs.
AmEx jumped 7.1 per cent after the credit card issuer topped Wall Street profit estimates as record investments in card rewards contributed to higher customer spending.
“What’s happening in this season is even if you meet, that’s not good enough, you’ve got to beat convincingly,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
Of the 52 companies among the S&P 500 that have reported first-quarter earnings through Wednesday, 78.8 per cent topped profit expectations, according to Thomson Reuters data.
Another bright spot was Amazon, which gained 1.6 per cent after the e-commerce retailer said it now has more than 100 million Amazon Prime members globally.
Oil prices hit highs not seen since 2014, with U.S. crude edging closer to $70 a barrel, after OPEC producers told Reuters the inventory overhang has largely disappeared and as top exporter Saudi Arabia aims to push prices even higher.
Traders said speculators continue to bet on further upside, expecting potential supply disruptions and further drawdowns, driven by strong demand.
U.S. West Texas Intermediate (WTI) crude futures were up 57 cents at $69.03, after earlier hitting $69.56, their highest since Nov. 28, 2014. More than 530,000 contracts changed hands on CME Group’s New York Mercantile Exchange, compared with an average daily of about 615,000 contracts.
Brent crude futures was up 96 cents to $74.44. The global benchmark touched $74.74 a barrel, highest since Nov. 27, 2014 - the day OPEC decided to pump as much as it could to defend market share.
Since the outset of the late 2016 agreement to reduce supply, reached by the Organization of the Petroleum Exporting Countries and non-members including Russia, the inventory glut has largely been eliminated, OPEC sources said in Saudi Arabia on Thursday.
Reuters