Virus Crisis Deepens, TSX to Halt 3-Day Win Streak

Aurora, Hexo in Focus

Equities in Toronto looked set to snap a three-day winning streak on Friday as concerns over the rapid spread of the coronavirus outweighed optimism around a stimulus package, while a decline in oil prices dragged energy stocks lower.

The TSX Composite Index ailed 444.62 points, or 3.3%, to approach noon EDT Friday at 12,926.55

The Canadian dollar gave back 0.24 cents at 70.99 cents U.S.

The largest percentage gainers on the TSX were shares of cannabis producers Aurora Cannabis, which jumped 17 cents, or 13.1%, to $1.43, followed by Hexo Corp, which rose 17 cents, or 11.2%, to $1.64.

Among other firms, Lululemon Athletica beat analysts' estimates for quarterly results on Thursday, lifted by strong holiday season demand, but the athletic apparel maker did not give a full-year forecast as the coronavirus fuels uncertainty.

In New York, Lululemon shares dumped $10.01, or 5%, to $190.79.

Chorus Aviation fell 45 cents, or 11.5%, to $3.45, while Freehold Royalties, slipped 28 cents, or 9.8%, to $2.59.

On the economic front, Statistics Canada reported that the average weekly earnings of non-farm payroll employees were $1,051 in January, up 0.6% from the previous month.

Year over year, earnings rose 4.0%. Non-farm payroll employees worked an average of 33.0 hours per week in January, up from both the previous month (32.8 hours) and January 2019 (32.6 hours).

ON BAYSTREET

The TSX Venture Exchange dumped 7.47 points, or 1.9%, to 390.96.

All but two of the 12 TSX subgroups moved lower, with energy down 8.1%, information technology subsiding 5%, and consumer discretionary slumping 4.8%.

The two stalwarts proved to be health-care, up 0.6%, and real-estate, inching up 0.1%.

ON WALLSTREET

Stocks fell sharply on Friday, giving back some of the strong gains experienced in the previous three days to cap off another volatile week on Wall Street.

Sentiment took a hit as investors focused back on the coronavirus outbreak as the U.S. became the country with the most confirmed cases.

The Dow Jones Industrials came off its lows of the morning, but was still considerably behind Thursday’s close, 822.12 points, or 3.7%, to 21,730.05.

The broader S&P 500 lost 89.34 points, or 3.4%, to 2,540.73,

The NASDAQ slipped 260.67 points, or 3.5%, to 7,527.78.

Still, the major averages entered Friday’s session up sharply for the week. The S&P 500 was up 14.1% and NASDAQ gained 13.3%, through Thursday’s close. The Dow had rallied 17.6%.

Despite the market’s strong three-day gains, the major averages were still more than 20% below the record highs set last month. Investors have been dumping riskier assets such as stocks amid uncertainty over the economic blow from the coronavirus.

Boeing dropped more than 10% to lead the Dow lower. Disney and Exxon Mobil each fell more than 6%. Boeing fell after Treasury Secretary Steven Mnuchin said the airplane maker won’t seek a government bailout. Energy and industrials were the worst-performing sectors in the S&P 500, energy dropping 5.7% and industrials tailing off 4.6%.

Energy was pressured by a 5.2% drop in crude prices.

The Dow rallied more than 6% Thursday to post its biggest three-day gain since 1931. From Monday’s close through the end of Thursday’s session, the Dow was up more than 20%. The S&P 500 also rallied more than 6% and was up over 20% since Monday’s close as well.

Global cases of the coronavirus have surged to more than 542,700 with at least 85,996 in the U.S., according to data from Johns Hopkins University.

The U.S. has now overtaken China as the country with the most confirmed cases in the world. President Donald Trump held a phone call with Chinese leader Xi Jinping, saying the two countries are “working closely together” to fight the pandemic. Meanwhile, U.K. Prime Minister Boris Johnson has tested positive for the coronavirus.

Prices for the 10-Year U.S. Treasury gained sharply, lowering yields to 0.74% from Thursday’s 0.84%. Treasury prices and yields move in opposite directions.

Oil prices dipped $1.35 to $21.25 U.S. a barrel.

Gold prices ditched $11.60 to $1,648.70 U.S. an ounce.