Equity markets in Toronto lost ground early Wednesday, as the partial U.S. government shutdown entered its second day, with investors worrying about its implications on debt ceiling talks later this month.
The S&P/TSX composite index fell 28.73 points to open Wednesday at 12,818.71
The Canadian dollar sagged 0.06 cents to 96.78 cents U.S.
Fertilizer whiz Agrium Inc. said on Tuesday it has completed its purchase of Viterra Inc's Canadian farm retail stores. Agrium shares strengthened 18 cents to $87.25.
Pacific Rubiales will offer more Colombian crude on the open market by December after it takes over the production of Petrominerales, according to sources. Rubiales shares gathered three cents to $21.22.
Benchmark initiated coverage on Imax Corp. with a hold rating on its U.S. listed shares with a price target of $29.42, saying it remains optimistic near term over the Imax brand and premium ticket experience it offers to a rapidly unfolding international growth opportunity. Imax shares gave back 70 cents each to $29.98.
National Bank Financial started coverage on Milestone Apartments REIT with an outperform rating and a target price of $11.60, saying the company's integrated management platform is poised for outsized growth in strong U.S. markets. Milestone units dropped a penny to $9.49.
ON BAYSTREET
The TSX Venture Exchange forged ahead 1.44 points to 943.48
All but four of the 14 Toronto subgroups were lower at the outset. Health-care stocks dropped 0.7%, energy, down 0.6% and consumer staples, falling 0.6%.
The four gainers were led by gold, up 1.9%, materials, tacking on 1.2%, and the metals and mining group, inching up 0.2%.
ON WALLSTREET
After rising on the first day of the U.S. government shutdown, investors are becoming more alarmed about the ramifications of the political stalemate in Washington.
The Dow Jones Industrials fell back 130.67 points to open Wednesday at 15,060.80
The S&P 500 index dipped 10.36 points to 1,684.64. The NASDAQ shrank 25.05 points to 3,792.94
The biggest worry now: the potential for a government default on October 17. If Congress fails to raise the debt ceiling, the U.S. government will be unable to pay all of its bills later this month.
Treasury Secretary Jack Lew said Tuesday that the government has started to use the last of its "extraordinary measures" to ensure it stays below debt ceiling.
With Congress unable to agree on a deal to fund the government past Monday, more than 800,000 federal workers are being furloughed without pay this week. In addition, government agencies are curtailing their services, and federal museums, parks and monuments are closed to the public.
Shares of agriculture technology firm Monsanto dropped after the company missed earnings expectations.
Shares of Tesla fell following an analyst downgrade. But the stock remains one of the best performers of the year as individual investors have embraced the maker of the electric Model S.
The IPO boom continued this week despite the government shutdown. Three companies are set to debut Wednesday.
Empire State Reality Trust, which owns the Empire State Building and other real estate holdings in the New York City area, will start trading as a public company after raising $930 million U.S. through an initial public offering.
Real estate broker Re/Max and Burlington Holdings, the owner of the Burlington Coat Factory, will also begin trading.
Payroll processor ADP's monthly report on private-sector jobs showed that the U.S. added 166,000 jobs in September, slightly below expectations. The report has more significance this month than usual. It appears increasingly unlikely that the U.S. government's monthly employment report will be released this Friday because of the government shutdown.
Prices for the 10-year U.S. Treasury gained ground, lowering yields to 2.61% from Tuesday’s 2.65%. Treasury prices and yields move in opposite directions.
Oil prices faded 44 cents to $101.60 U.S. a barrel.
Gold prices added $17 at $1,303.10 U.S. an ounce.
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