Stocks in Toronto decreased as morning became afternoon on Tuesday, dragged down by mining and oil companies ahead of the release of plans on domestic fiscal spending and a U.S. monetary policy decision.
The S&P/TSX Composite dumped 77.83 points by lunch hour Tuesday to 20,670.62.
The Canadian dollar slid 0.24 cents at 77.83 cents U.S.
Scotiabank added 18 cents to $86.08, after declaring on Monday it would pause its plan for employees working remotely to return to its Toronto head office starting on Jan. 17 due to concerns about the Omicron variant.
Techs, however, were on the downside, as Nuvei Corp. shares tumbled $4.62, or 6.2%, to $70.02, while Dye & Durham slipped $1.70, or 3.7%, to $43.90.
Among communication stocks, Corus Entertainment retreated 15 cents, or 3.3%, to $4.47, while BCE moved lower $1.60, or 2.4%, to $64.19.
COVID-19 cases in Canada could see a swift rise in the days to come due to community spread of Omicron, mirroring the situation in Ontario.
Prime Minister Justin Trudeau's government will outline new fiscal and economic forecasts in a document to be released Tuesday as inflation surges and as business groups and opposition politicians call for more spending restraint.
The Bank of Canada on Monday unveiled an agreement with the federal government to keep its inflation target unchanged at 2%, adding that it would now take labour market factors into account as well, which could keep interest rates low for longer in times of crisis.
ON BAYSTREET
The TSX Venture Exchange faded 16.18 points, or 1.8%, to 877.40.
Eight of the 12 TSX subgroups were lower midday, with information technology sinking 1.6%, communications down 0.9%, and real-estate trailing Monday’s close by 0.7%.
The four gainers were led by industrials, up 0.5%, while financial and health-care stocks each nosed up 0.2%.
ON WALLSTREET
U.S. stocks slipped during morning trading Tuesday as new inflation data continued to show a sharp rise in prices.
The Dow Jones Industrials faded into the red 169.37 points to 35,481.58, boosted by bank stocks.
The S&P 500 index lost 57.5 points, or 1.2%, to 4,611.47.
The NASDAQ wilted 290.24 points, or 1.9%, at 15,123.05.
Tesla shares were among the biggest early decliners on the S&P 500, falling 2.3% after CEO Elon Musk announced that that he has sold another $906.5 million in shares.
Fellow automaker Ford also fell, down 2.7% following news that by 2030 Toyota would be investing $35 billion into battery-powered electronic vehicles, a space where Ford has sought to establish itself as a leader.
Microsoft was a major drag on the market averages, falling more than 3%.
On the other hand, bank stocks rose along with interest rates, with Goldman Sachs and JPMorgan Chase each adding more than 1%.
On the COVID front, Pfizer announced that its drug aimed at treating patients with the virus proved effective in a final analysis, including against the new omicron variant.
The downfall for stocks comes after the November reading for the producer price index showed a year-over-year increase of 9.6%, the fastest pace on record and above the 9.2% expected by economists, according to Dow Jones. The index rose 0.8% month over month, above the 0.5% expected.
The hotter-than-expected inflation reading comes as the Federal Reserve also kicks off its two-day meeting on Tuesday. The central bank will release a statement on Wednesday with quarterly projections for the economy, inflation and interest rates. Chairman Jerome Powell will also hold a press conference.
Prices for 10-year Treasurys fell a bit, raising yields to 1.43% from Monday’s 1.42%. Treasury prices and yields move in opposite directions.
Oil prices dipped $1.24 to $70.05 U.S. a barrel.
Gold prices let go of $14.80 to $1,773.50 U.S. an ounce.
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