Downward Plunge Continues

Silvercorp, Alaris in Focus


Canada's main stock index fell on Monday due to heightened fears of a global recession as the fast-spreading coronavirus forced lockdowns across several countries.

The TSX Composite Index dropped 298.21 points, or 2.5%, to drift into noon hour at 11,553.60

The Canadian dollar relinquished 0.38 cents at 68.78 cents U.S.

The top percentage gainer on the TSX proved to be shares of Silvercorp Metals, which jumped 97 cents, or 26.9%, to $4.58, followed by shares of Semafo, which rose 49 cents, or 24.6%, to $2.48.

BRP fell $4.68, or 19.1%, the most on the TSX, to $19.89, followed by shares of Alaris Royalty, down $1.05, or 14.1%, to $6.42.

The Canadian death toll from the virus outbreak jumped by more than 50% on Sunday, and impatient officials threatened to punish people refusing to take precautions to fight the spread of the highly contagious illness.

On the economic slate, Statistics Canada reported that wholesale trade increased for a second consecutive month, up 1.8% to $65.2 billion in January.

ON BAYSTREET

The TSX Venture Exchange gave back 6.35 points, or 1.8%, to 350.19

All but three of the 12 TSX subgroups were negative by noon hour, with real-estate taking a beating of 11.3%, utilities, down 7%, financials, off 4.7%.

The three gainers were gold, up 8.4%, materials, ahead 5.2%, and information technology, progressing 1.1%.

ON WALLSTREET

Stocks fell sharply on Monday even after the Federal Reserve unveiled new measures to keep markets working properly. Wall Street awaited Washington lawmakers to agree to an economic stimulus and rescue plan to cushion the blow from the coronavirus outbreak.

The major averages pared losses midday after Senate Minority Leader Chuck Schumer said he expects the Senate to on Monday reach a deal on a massive fiscal stimulus package.

The Dow Jones Industrials slumped 667.06 points, or 3.5%, to 18,506.92. The 30-stock average also hit its lowest level in three years

The broader S&P 500 fell 80.59 points, or 3.5 %, to 2,224.37

The NASDAQ tumbled 128.59 points, or 1.9%, to 6,749.93.

Boeing shares rose 4.6%, outperforming the market, as Goldman Sachs made a bold call Sunday evening, telling clients the company had enough cash to survive the coronavirus downturn and that air travel would eventually return. The shares are off 70% this year.

One of the measures taken by the Fed was an open-ended asset purchase program, which the central bank will run in the "amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy."

A fiscal stimulus bill failed a key procedural Senate vote Sunday as Democrats warned the measure did not do enough to help impacted workers and instead offered too much for company bailouts. House Speaker Nancy Pelosi had signaled she was not on board with the Republican version of the stimulus plan, saying: “From my standpoint, we’re apart.”

Economists at Goldman Sachs wrote Friday they expect a 24% contraction for the second quarter after a 6% drop in the first quarter. One Morgan Stanley economist said in a note Sunday she expects a historic 30% contraction in the second quarter.

Prices for the 10-Year U.S. Treasury gained ground, lowering yields to 0.78% from Friday’s 0.88%. Treasury prices and yields move in opposite directions.

Oil prices slid 42 cents to $22.21 U.S. a barrel.

Gold prices increased $67.00 to $1,551.60 U.S. an ounce.