Canada's main stock index dropped more than 2% on Monday as a sharp selloff in the price of oil sent shares of energy companies tumbling, with investors trying to assess the impact of the recent pullback on both the economy and equity markets.
The S&P/TSX composite index faltered 373.82 points, or 2.5%, to greet noon at 14,379.83
The Canadian dollar dipped 0.05 cents to 84.80 cents U.S.
The energy sector shed more than 5% in the session and has lost about a third of its value in the last six months. Oil prices plunged to a five-and-a-half-year low on persistent concerns about oversupply.
Canadian Natural Resourcesled the decline among energy shares, diving 6.8% to $33.84. Suncor Energy gave back 4.8% to $35.55.
Weaker copper prices, which were down 1.6%, pulled mining stocks lower. First Quantum Minerals Ltd declined 6.2%to $16.07, and Teck Resources Ltd lost 3.9% to $15.50.
The financial sector also retreated, as Toronto Dominion Bank was down 2.6% to $53.80.
ON BAYSTREET
The TSX Venture Exchange was negative 13.57 points, or 1.9%, to 693.25
All but one of the 14 Toronto subgroups were lower, as energy collapsed 6.4%, metals and mining retreated 4.8%, and global base metals capsized 4%
Only real-estate seemed to hold out against the negative tide, inching up 0.3%.
ON WALLSTREET
It's quite the sobering Monday on Wall Street as many traders and investors return from their holiday hiatus.
The Dow Jones Industrials staggered 264.62 points, or 1.5%, to 17,568.37, with Chevron leading blue-chip declines that included 27 of its 30 components.
The S&P 500 dropped 30.95 points to 2,027.25. The NASDAQ index fell 50.82 points to 4,675.99.
Equities did not get any relief as U.S. automakers reported strong domestic sales in December, with General Motors surpassing estimates and posting a 19% gain for the month.
The main culprits of market jitters these days are falling oil prices and the souring global economy. Crude oil now trades at about $50 U.S. and even dipped briefly below that level on Monday -- another psychological threshold for the market.
Experts now predict oil could go as low as $40 U.S. or even $30 a barrel. While that's great for U.S. consumers, who are enjoying gas prices of $2 or less not seen since the worst of the Great Recession, there comes a point when sustained low prices begin to really hurt energy company stocks and jobs in the U.S. and other countries around the world.
Today's biggest stock losers are all energy drillers -- Denbury Resources, Noble Energy and Anadarko Petroleum.
Prices for 10-year U.S. Treasuries gained ground, lowering yields to 2.06% from Friday’s 2.12%. Treasury prices and yields move in opposite directions.
Oil prices descended $2.38 per barrel to $50.31 U.S.
Gold prices boosted $9.50 an ounce at $1,195.70 U.S.
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