Toronto Markets Roughed Up

Health-Care, Gold Bruised Worst

It was something of a bleak Monday on equity markets in Canada, as indices rode losses in health-care and resource stock to month-long lows.

The S&P/TSX Composite Index stumbled 144.5 points to close Monday at 16,094.72, placing the index firmly in the red for the year so far.

The Canadian dollar weakened 0.15 cents to 81.06 cents U.S.

Cannabis company Aphria Inc fell $1.22, or 6.1%, to $18.94 after it said it would buy Nuuvera Inc for $826 million to expand globally. Shares of Nuuvera jumped 71 cents, or 10.1%, to $7.71. One of the largest decliners on the index proved Canopy Growth, down $2.46, or 7%, to $32.63.

Gold producers retreated. Among the decliners, Barrick Gold shed 51 cents, or 2.8%, to $17.69, while Goldcorp settled 57 cents, or 3.1%, to $17.62.

In the resource field, First Quantum Minerals sank 47 cents, or 2.5%, to $18.51, while Agnico Eagle Mines gave back $1.95, or 3.2%, to $58.77.

Among the most active Canadian stocks by volume, Bombardier was up seven cents, or 2%, at $3.61 after a U.S. trade commission on Friday backed the Canadian plane maker in a trade dispute with Boeing.

Officials from the United States, Canada and Mexico will wrap up the sixth of seven planned rounds of talks on the North American Free Trade Agreement in Montreal on Monday, with little sign of agreement on the toughest U.S. proposals to overhaul the $1.2-trillion pact.

ON BAYSTREET

The TSX Venture Exchange faltered 11.52 points, or 1.3%, to 879.18

All but one of 12 TSX subgroups were lower on the session, as health-care slumped 3.5%, gold slid 2.9%, and materials were worse off 1.8%.

Only industrials held out against the negative tide, inching up but 0.1%.

ON WALLSTREET

U.S. stocks posted the biggest drop of this young year after the 10-year treasury yield shot higher, raising concerns higher interest rates would snuff out the bull market.

The Dow Jones industrial average dropped 177.23 points from Friday’s all-time high to 26,439.48, and was also on track for its biggest decline of 2018

The S&P 500 slumped 19.34 points to 2,853.53, only its fifth down day of the year and by far its biggest.

The NASDAQ fell 39.27 points to 7,466.50

Utilities, telecommunications and real estate were among the worst-performing sectors on Monday. These sectors are negatively affected by higher interest rates. Meanwhile, shares of Goldman Sachs and Bank of America, two stocks that benefit from higher interest rates, traded 1.7% and 0.2%, respectively.

Equities were boosted last week by stronger-than-expected quarterly results from major companies. Thus far, the corporate earnings season has been strong. Of the S&P 500 companies that have reported as of Monday morning, 78% have reported surpassed bottom-line expectations, while 77% have beaten revenue estimates

Boeing, McDonald's, Apple, Chevron, and Facebook are among the companies scheduled to report later this week.

Elsewhere in corporate news, K-Cup maker Keurig announced it will buy Dr Pepper Snapple. Keurig said Snapple shareholders will receive $103.75 per share in a special cash dividend and keep 13% of the new company. Dr Pepper Snapple jumped 29% on Monday.

The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, rose 0.2% in December. The so-called core PCE increased 1.5% in the 12 months through last month.

This will be a big week for Wall Street. The Federal Reserve's latest monetary policy decision is expected to be announced Wednesday. Later in the week, the U.S. government will release the latest employment figures.

Prices for the benchmark 10-year Treasury note plummeted, raising yields to 2.69% from Friday’s 2.66%. Treasury prices and yields move in opposite directions.

Oil prices forfeited 71 cents a barrel to $65.43 U.S.

Gold prices dipped $11.40 to $1,340.70 U.S. an ounce.