TSX Back in Red

Railways in Focus

Canada's main stock index faded from early gains by noon EDT Tuesday, a day after tumbling back into correction territory, restricted by gold and utilities.

The S&P/TSX reversed 127.75 points to 19,614.81.

The Canadian dollar lost 0.18 cents to 77.39 cents U.S.

The industrial sector rose 1.1%, aided by gains in railroad operators Canadian National Railway, which gained $1.33, or 1%, to $140.27, though Canadian Pacific Railway fell backward 25 cents to $87.75.

Gold stocks suffered the worst, with Seabridge Gold down 58 cents, or 3.3%, to $17.08, while Kinross Gold stumbled 22 cents, or 4%, to $5.25.

In utilities, Transalta Renewables staggered 57 cents, or 3.3%, to $16.59, while Boralex lost $1.35, or 3.2%, to $41.34.

Energy tried to lift things up, with Vermilion soaring $1.18, or 4.2%, to $29.16, while Enerplus acquired 30 cents, or 1.4%, to $21.93.

On the economic front, Statistics Canada reported Tuesday manufacturing sales increased 1.7% in April, mainly on higher sales of petroleum and coal products, motor vehicles, and primary metals.

Elsewhere, CBC News reports Ottawa will announce an end today to COVID-19 vaccine mandates for domestic travel on planes and trains and outgoing international travel.

ON BAYSTREET

The TSX Venture Exchange faded 13 points, or 1.9%, to 658.90.

Seven of the 12 TSX subgroups tripped over their feet in the first hour, however, as utilities and gold lost 0.7% each, while real-estate stepped back 0.5%.

The five gainers were powered by industrials, ahead 1%, while energy surged 0.5%, and materials took on 0.4%.

ON WALLSTREET

Stocks fell on Tuesday, as the market struggled to rebound from Monday’s steep declines that pushed the S&P 500 back into bear market territory and traders braced for a key monetary policy announcement from the Federal Reserve.

The Dow Jones Industrials fell 113.26 points to 30,403.52.

The S&P 500 dipped 1.48 points to 3,748.15.

The NASDAQ Composite moved higher 56.69 points to 10,868.80.

Shares of Oracle jumped more than 8% after the software company reported an earnings beat boosted by a “major increase in demand” in its infrastructure cloud business while FedEx shares soared 13% after announcing it would add three new directors to its board. The stock was on pace for its best day in more than 20 years.

Chevron and McDonald’s rose about 2% and 1%, respectively, paring back some of the Dow’s losses. The energy sector jumped 2%, boosted by shares of Occidental Petroleum and Phillips 66, which each rose more than 5%. Dow Transports also inched 2% buoyed by gains from FedEx and CH Robinson and was on pace for its best day since March.

Travel stocks slipped again with shares of Carnival and Norwegian Cruise Line down more than 1%. Airline stocks Delta and United also dipped about 1%. Meanwhile, Coinbase shares shed 4% after the company said it will cut 18% of its workforce.

Those losses came as expectations grow for the Fed to hike rates more than initially anticipated. Media reports circulated Monday that the Fed will “likely” consider a 75-basis-point increase, which is greater than the 50-basis-point hike many traders had come to expect. The Wall Street Journal reported the story first.

Investors digested another important inflation reading of May’s producer price index on Tuesday. It showed wholesale prices rise 10.8% and hover near a record pace.

Treasury prices gained a bit, lowering yields to 3.43% from Monday’s 3.38%. Treasury prices and yields move in opposite directions.

Oil prices gained $1.53 to $122.46 U.S. a barrel.

Gold prices dulled $19.60 to $1,812.20 U.S. an ounce.