TSX Still Down on Employment Fears

Badger, Vermilion in Focus

Equity markets in Canada staged a comeback toward the breakeven point as morning was becoming afternoon on Thursday. This, as data showed payroll jobs fell for a sixth straight month in August, while a stimulus plan from the U.S. Federal Reserve disappointed investors.

The TSX came off its lows of the morning, but trailed Wednesday’s close by 11.06 points, approaching noon at 16,284.60.

The Canadian dollar clipped off 0.07 cents to 75.79 cents U.S.

The largest percentage gainer on the TSX was Badger Daylighting, which jumped 71 cents, or 1.8%, to $40.41, followed by Bausch Health Cos that gained $1.09 or 4.9% to $23.30, after Bank of America raised its rating to "neutral" from "underperform".

Vermilion Energy fell 19 cents, or 4.4%, the most on the TSX, to $4.10,
while the second biggest decliner was Teranga Gold, down 50 cents, or 3.3%, to $14.90.

The most heavily traded shares by volume were Zenabis Global, which lost two cents, or 21.1% to 7.5 cents, and Just Energy Group, up 7.5 cents, or 26.3%, to 36 cents.

On the economic docket, figures released by payroll service provider ADP showed this country lost 205,400 jobs in August, as hiring tumbled in the construction, and trade, transportation and utilities sectors.

ON BAYSTREET

The TSX Venture Exchange fell 4.38 points to 742.97.

The 12 TSX subgroups were evenly split, as industrials tacked on 0.9%, and consumer staples and utilities each gained 0.6%.

The half-dozen laggards were weighed most by gold, sliding 1.4%, energy off 1.2%, and information technology down 0.9%.

ON WALLSTREET

Stocks dropped on Thursday as technology shares declined. The major averages, however, recovered most of their earlier losses as names that would benefit from the economy reopening rebounded.

The Dow Jones Industrial Average had done some catching up by noon EDT, but was still in the red 87.11 points to 27,945.23.

The S&P 500 slid 29.81 points to 3,355.88.

The NASDAQ slumped 169.78 points, or 1.5%, to 10,880.69

Technology stocks, which weighed on the market Wednesday and were the source of the sell-off earlier this month, were down again. Amazon, Microsoft, Alphabet and Facebook all lost at least 1%. Apple dipped 1.8%, while Tesla dropped more than 3%. Shares of Snowflake, an IPO which captivated Wall Street on Wednesday as it doubled in its debut, were off by 9.7%.

However, shares of United Airlines and American Airlines were slightly higher, erasing earlier losses after industry CEOs met with the White House in a last-minute plea for more coronavirus aid. Cruise operators Carnival and Norwegian Cruise Line were off their lows as well and Royal Caribbean traded 0.3% higher.

Thursday’s market gyrations come amid conflicting messages about the timeline for a coronavirus vaccine. President Donald Trump said late Wednesday that the U.S. could distribute a vaccine as early as October, contracting the director of the Centers for Disease Control and Prevention, who told lawmakers earlier in the day that vaccinations would be in limited quantities this year and not widely distributed for six to nine months.

Traders were also monitoring the status of stimulus talks after President Trump suggested Wednesday he could support a larger package. However, Politico was reporting that Senate Republicans appeared reluctant to do so without more details on a bill.

The latest U.S. weekly jobless claims came in slightly better than expected. First-time claims for unemployment insurance totaled 860,000 in the week ending Sept.12, versus an estimate of 875,000, according to economists polled by Dow Jones.

Investors evaluated for a second day the Federal Reserve’s interest rate outlook where it indicated rates could stay anchored to the zero-bound through 2023 as the central bank tries to spur inflation. Fed Chairman Jerome Powell also pressed lawmakers to move forward with stimulus.

Prices for the 10-Year Treasury gained sharply, lowering yields to 0.68% from Wednesday’s 0.7%. Treasury prices and yields move in opposite directions.

Oil prices recovered 69 cents to $40.85 U.S. a barrel.

Gold prices were down 18.70 to $1,951.80 U.S. an ounce.