Stocks Tumble by Noon Following BoC Decision

Oceanagold, TFI in Focus

Stocks in Canada’s largest centre moved lower by midday Wednesday after the country's central bank held its key interest rate steady and trimmed its bond-buying program, even as it predicted near-term inflation would be higher than previously forecast.

TSX Composite index fell back 57.53 points to greet noon hour EDT at 20,213.12

The Canadian dollar forged ahead 0.39 cents to 79.90 cents U.S.

Oceanagold jumped 14 cents, or 6%, to $2.41, after the Philippine government renewed a contract with the company for another 25 years.

TFI International rose $8.90, or 7.8%, to $122.69 following a target price
hike from CIBC.

Organigram Holdings was the top loser, falling 28 cents, or 7.6%, to $3.40, a day after jumping 12% on upbeat earnings. The second-biggest decliner was Lithium Americas, down 77 cents, or 4.1% to $17.96.

The Bank of Canada announced it is cutting its expectations for economic growth this year as it keeps its key interest rate target on hold at 0.25%.

The central bank says it expects the economy to grow 6% in 2021, down from its previous forecast of 6.5%.

Elsewhere on the economic front, Statistics Canada reported manufacturing sales declined 0.6% in May, on lower sales in 11 of 21 industries led by the machinery, chemical and fabricated metal product industries.

ON BAYSTREET

The TSX Venture Exchange stepped backward 4.16 points to 937.46.

Seven of the 12 TSX subgroups gained ground by noon hour, with gold soaring 0.7%, while communications and real-estate issues each cleared breakeven 0.2%.

The five laggards were weighed most by health-care, sagging 3.1%, energy, doffing 1.3%, and consumer discretionary stocks, off 0.6%.

ON WALLSTREET

U.S. stock index were little changed near records on Wednesday after Federal Reserve Chairman Jerome Powell said the central bank is not close to altering its easy monetary policies.

The Dow Jones Industrials inched up 9.57 points to 34,898.36

The S&P 500 gained 6.17 points to 4,375.31.

The NASDAQ advanced 15.95 points to 14,693.60.

Apple shares jumped around 2% after the company reportedly asked suppliers to ramp up production of its next-generation iPhones by 20%. JPMorgan also added the tech giant to its focus list and raised its price target on the stock to imply 20% potential upside.

Second-quarter earnings reports from big banks and other major companies continued on Wednesday. As investors focus on Fed headlines and inflation readings, earnings so far this week have not led to major stock moves despite better-than-expected results.

Bank of America shares fell after it reported second-quarter revenue of $21.6 billion, just under the $21.8 billion estimate from Refinitiv. Low interest rates knocked net interest income by 6%, the bank said.

Meanwhile, American Airlines shares jumped after the carrier forecast better revenue and a narrower loss than its previous estimate for the second quarter. The company is set to report quarterly fiscal results on July 22.

The S&P 500 is up more than 16% in 2021 and more than 37% in the past 12 months, signaling good news might be priced into shares. S&P 500 profit growth is expected to total 64% year-over-year for the quarter.

Powell said in his semi-annual testimony before Congress Wednesday that the central bank can wait before it starts to ease its bond purchases despite surging inflation readings. Powell said he still expects inflation to moderate.

The central bank chief is speaking before the House Committee on Financial Services. He is scheduled to testify before the Senate on Thursday.

Prices for 10-Year Treasurys sagged, raising yields to 1.37% from Tuesday’s 1.35%. Treasury prices and yields move in opposite directions.

Oil prices dropped $1.62 to $73.63 U.S. a barrel.

Gold prices brightened $12.40 to $1,822.30 U.S. an ounce.