Economic Fears Drive Down Stock Prices

Home Capital, Turquoise Hill in Focus

Canada's main stock index fell from a nine-week peak on Monday, as energy stocks were hit by tumbling oil prices after weaker-than-expected Chinese data revived fears about a global economic slowdown.

The TSX came off its lows of the morning, but still trailed breakeven 56.06 points to approach noon EDT Monday at 20,123.75.

The Canadian dollar shed 0.66 cents to 77.58 cents U.S.

Among single stocks, Turquoise Hill Resources slumped $3.45, or 10.3, to $30.09, after it rejected an offer by majority shareholder Rio Tinto to buy the 49% stake it does not already own for $2.7 billion.

Home Capital Group rejected a takeover bid from a buyer it did not name, saying the offer undervalued the mortgage lender. Home Capital shares vaulted $2.89, or 10.2%, to $31.36.


On the economic calendar, June wholesale sales rose 0.1% to $80.7 billion. This growth was attributable to increases in the miscellaneous goods and motor vehicle and motor vehicle and motor vehicle parts and accessories subsectors.

Elsewhere, Statistics Canada said manufacturing sales fell 0.8% in June, mainly on lower sales of petroleum and coal products and of wood products. Excluding the petroleum and coal product industry, sales rose 0.5% in June.

The Canadian Real Estate Association reported national home sales fell by 5.3% on a month-over-month basis in July.

ON BAYSTREET

The TSX Venture Exchange faded 2.27 points to 678.52.

The 12 TSX subgroups were evenly split midday, with health-care perking 3.6%, while consumer discretionary and consumer staples stock each picked up 0.9%.

The half-dozen laggards were weighed by energy, backpedaling 2.5%, materials, down 1.1% and gold, duller in price by 0.7%.

ON WALLSTREET

U.S. equities rose on Monday as the rally on Wall Street looked to continue its bounce and traders prepared for a big week for retail earnings.

The Dow Jones Industrials sailed higher 120.7 points to break for lunch at 33,881.75

The S&P 500 recovered 9.08 points to 4,289.23

The NASDAQ Composite picked up 46.08 points, or to 13,093.27.

Monday’s moves come after disappointing economic data out of China overnight. The country’s central bank also cut rates unexpectedly, raising concern over China’s economic recovery.

Stocks opened the session lower, led by declines in energy and financials, before rebounding into positive territory.

Consumer staples, communication services and consumer discretionary moved higher, while Tesla pulled technology into positive territory. Disney gained on news of hedge fund manager Dan Loeb’s fresh stake.

Investors are looking ahead to a week of earnings from big retailers including Home Depot, Walmart and Target, and listening for clues on how their businesses have been affected by inflation and other macro challenges in the most recent quarter.

Treasury prices were up, lowering yields to 2.79% from Friday’s 2.84%.

Oil prices tumbled $3.39 to $88.70 U.S. a barrel.

Gold prices fell $20.50 to $1,795.00 U.S. an ounce.