Canada's main stock index futures tumbled on Thursday as oil prices plunged following travel restrictions imposed by U.S. President Donald Trump in an attempt to stop the spread of the coronavirus after the World Health Organization called the outbreak a pandemic.
The TSX Composite Index tumbled 688 points, or 4.6%, Wednesday to 14,270.09
The Canadian dollar lost 0.28 cents higher early Thursday to 72.32 cents U.S.
March futures sank 3.7% early Thursday.
The coronavirus outbreak has forced Canada to cancel an international meeting next week that was to discuss challenges to the World Trade Organization, a Trade Ministry spokeswoman said on Wednesday.
Bombardier Inc said late Wednesday Chief Executive Officer Alain Bellemare would step down and be replaced by former company executive and Hydro-Quebec CEO Eric Martel.
Union workers at Husky Energy's 177,000-barrel-per-day (bpd) refinery in Lima, Ohio, voted against ratifying a two-year contract with Husky on Wednesday evening.
Canaccord Genuity cut the price target on Air Canada to $40.00 from $55.00
RBC cut the price target on Stella-Jones to $44.00 from $47.00
National Bank of Canada raised the price target on Wheaton Precious Metals to $52.00 from $50.00
ON BAYSTREET
The TSX Venture Exchange fell 25.87 points, or 5.6%, Wednesday to 438.87.
ON WALLSTREET
Futures contracts tied to the major U.S. stock indexes dove early Thursday after an address from President Donald Trump failed to quell concerns over the possible economic slowdown from the coronavirus.
Futures for the Dow Jones Industrials flopped 1,231 points, or 5.2%, early Thursday to 24,344.
Futures for the S&P 500 sank 139.25 points, or 5.1%, at 2,601.
Futures for the NASDAQ Composite dwindled 402 points, on 5%, to 7,601.50.
Futures on the Dow Jones Industrial average, the S&P 500 and NASDAQ-100 all traded at the so-called limit down threshold, off by 5%. Dow futures implied a loss of more than 1,100 points at the open.
Exchanges halt trading of futures contracts if they drop by more than 5%, acting as a floor for selling until regular trading resumes at the opening bell at 9:30 a.m. ET. After stocks open in regular trading, the S&P 500 must drop by 7% before triggering the New York Stock Exchange’s circuit breaker, which halts trading temporarily.
On Wednesday, the Dow ended its historic 11-year bull market run by closing in bear-market territory. A bear market marks a 20% decline from all-time highs. The S&P 500 was just shy of that threshold going into Thursday’s trading and was poised to enter bear market territory based on futures losses.
Cruise line shares dropped sharply. Royal Caribbean traded 15% lower in the pre-market while Carnival doffed 15.6%, and Norwegian Cruise Line slid 16.8%. Airline shares such as United, Delta and American all fell more than 14%.
In his address, Trump announced travel from Europe will be suspended for 30 days as part of the government’s response to the coronavirus outbreak. Trump also said the administration would provide financial relief for workers who are ill, caring for others due to the virus or are quarantined.
These moves were not specific enough for investors, however, who were looking for a more robust fiscal response to curb potentially slower economic growth stemming from the coronavirus.
Overseas, in Japan, the Nikkei 225 capsized 4.4% Thursday, while in Hong Kong, the Hang Seng Index toppled 3.7%.
Oil prices dipped $1.92 to $31.06 U.S. a barrel.
Gold prices moved lower $15.80 to $1,626.50 U.S. an ounce.
