Stocks Continue Downward Slide

Tesla, Softbank in Vogue

Equities in for stocks in Canada’s largest centre fell at the open on Tuesday, as lower oil prices and a tech-fueled slide on Wall Street dampened risk appetite.

The TSX picked up from where it left off last week, opening 221.97 points, or 1.4%, lower, to begin Tuesday at 15,996.04

The Canadian dollar dumped 0.51 cents to 75.84 cents U.S.

Markets across North America were shuttered Monday for Labour Day.

Aurora Cannabis on Tuesday appointed insider Miguel Martin as its chief executive officer and said it would record up to $1.8 billion, in impairment charges in the fourth quarter.

The cannabis company began the trading day down 52 cents, or 4.7%, to $10.60.

ON BAYSTREET

The TSX Venture Exchange erased 13.55 points, or 1.9%, to 720.14.

All but one of the 12 TSX subgroups were negative in the first hour, with energy retreating 5.4%, gold sinking 2.5%, and materials off 2.2%.

The lone gainer was consumer staples, up 0.2%.

ON WALLSTREET

Stocks fell sharply on Tuesday to start the week as technology shares were under pressure following their worst selloff in more than five months last week.

The Dow Jones Industrials got smacked 500.05 points, or 1.8%, to 27,633.26.

The S&P 500 fell 55.96 points, or 1.6%, to 3,371.

The NASDAQ Composite stumbled 216.68 points, or 1.9%, to 11,096.46.

Tesla plunged 18.4% after the S&P Dow Jones Indices failed to add the surging and speculative stock to the S&P 500 after the bell Friday.

Investors were betting on inclusion of the stock into the S&P 500, hoping for the stamp of approval on the rally by S&P. The snub shows the risks to the overheating NASDAQ trade.

Other hot NASDAQ stocks were hit hard. Facebook, Amazon, Netflix, and Google-parent Alphabet were all down more than 2.8%. Apple dropped 5.2%. Zoom Video fell by 5.2%.

Shares of Softbank dropped 7% on Monday in Japan as it was identified as the big options buyer making a bet in the billions on tech stocks continuing to surge. The tech trade could lose some of its firepower if Softbank were to curb those bets.

Semiconductor stocks were under pressure amid simmering U.S.-China trade tensions. Nvidia slid 6.4% and Micron lost 3.9%. Applied Materials dropped more than 6%. Advanced Micro Devices pulled back by 3.9%.

Many on Wall Street believe the weakness derived from worries that the massive tech run-up pushed valuations to unsustainable levels. Even with last week’s pullback, the NASDAQ is up more than 70% from its March bottom.

Geopolitical developments also weighed on investor sentiment Tuesday. China accused the U.S. of “bullying” as it launched a global data security initiative on Tuesday.

That came as Washington continues to pressure China’s largest tech firms and convince countries around the world to block them. President Donald Trump also recently entertained the idea of “decoupling” from China, or refusing to do business with the country.

Prices for the 10-Year Treasury eked up, lowering yields to 0.67% from Friday’s 0.68%. Treasury prices and yields move in opposite directions.

Oil prices chucked three dollars to $36.77 U.S. a barrel.

Gold prices shed $9.70 to $1,924.60 U.S. an ounce.