Stocks Lower as Investors Take Profits

Dobeco, HUT Bruised

It was only the second session of the year, but stocks in Toronto suffered sharp reversals Wednesday and finished much lower.

The S&P/TSX Composite collapsed 196.64 points to close Wednesday at 21,039.88.

The Canadian dollar weakened 0.37 cents to 78.34 cents U.S.

Tech shares held things down, however, with Docebo wilting $10.10, or 12.5%, to $70.61, while HUT 8 Mining doffed $1.25, or 12.1%, to $9.07.

Health-care was also in the red, with Well Health Technologies falling 33 cents, or 6.5%, to $4.76, while Tilray gave back 56 cents, or 6.2%, to $8.51.

Real-estate also took its lumps, with H&R REIT sank $3.13, or 19.7%, to $12.76, while FirstService lost $7.57, or 3.2%, to $233.01.

Energy remained positive, however, with Crescent Point Energy gaining 20 cents, or 2.8%, to $7.40, while Cenovus Energy gained 30 cents, or 1.8%, to $16.58.

Communications also tried to lift investors spirits, with Rogers sprinting 90 cents, or 1.5%, to $61.81, while Quebecor took on 18 cents to $28.48.

On the economic calendar, Statistics Canada the total value of building permits increased 6.8% to $11.2 billion in November.

The agency went on to say seven provinces, led by Alberta (+20.6%) reported increases. Construction intentions in the residential sector rose 12.0% while the non-residential sector declined 3.4%.

Federal Transport Minister Omar Alghabra on Tuesday called for an investigation into reports of maskless revelers on a recent Sunwing Airlines flight to Cancun, as the country battles soaring cases of COVID-19.

ON BAYSTREET

The TSX Venture Exchange lost 16.14 points, or 1.7%, to 924.43.

All but two of the 12 TSX subgroups were lower, with health-care off 3.5%, information technology down 3.2%, and real-estate lower by 1.6%.

The two gainers were communications, better by 0.4%, and energy, ahead 0.3%.

ON WALLSTREET

Stocks fell sharply Wednesday, with the Dow Jones Industrial Average suffering its first decline of 2022, as Wall Street geared up for potentially tighter U.S. monetary policy.

The blue-chip index went into a tailspin and descended 392.54 points, or 1.1%, from Tuesday’s all-time record, concluding the day at 36,407.

The S&P 500 index dipped 92.96 points, or 1.9%, to 4,700.58.

The NASDAQ tumbled 522.54 points, or 3.3%, at 15,100.17. The tech-heavy index saw its biggest one-day loss since February.

Rates also jumped, putting pressure on equities, after the minutes from the Federal Reserve’s most recent meeting showed the central bank has discussed reducing its balance sheet shortly after it raises rates later this year.

The Fed is tapering its bond purchases now and has already indicated to the market that it will raise rates soon after it finishes that taper in March. But the market is awaiting indications from the Fed on what it will do with its nearly $9-trillion balance sheet once it’s done increasing it.

The minutes show officials to be considering shrinking the balance sheet along with raising rates as another way to remove policy accommodation.

Megacap tech stocks fell, with Netflix and Alphabet each dropping at least 4%. Meta Platforms and Microsoft both lost more than 3%, and Apple slid 2.7%.

Salesforce dropped 8.2% following a downgrade from UBS. The firm also cut Adobe, sending its shares down 7.1%. Among chipmakers, Advanced Micro Devices and Nvidia both fell about 5%.

Honeywell and Caterpillar posted small gains amid the broader market sell-off. Fellow Dow member Pfizer gained 2% after analysts at Bank of America upgraded the stock.

ADP reported Wednesday that private job growth totaled 807,000 in December, more than double the Dow Jones estimate of 375,000. The data in the report covers only through the middle of December, however, which was before the height of the escalation in COVID cases and concerns.

Investors looking for clues on where the economy stands heading into the New Year also awaited Friday’s more closely watched non-farm payrolls count, which is expected to show a gain of 422,000.

Prices for 10-year Treasurys eased back, raising yields to 1.70% from Tuesday’s 1.65%. Treasury prices and yields move in opposite directions.

Oil prices poked ahead 12 cents to $77.11 U.S. a barrel.

Gold prices fell $4.80 to $1,809.80 U.S. an ounce.