Stocks Continue in Doldrums

Interfor, Tricon in Focus

Equities in Canada’s largest centre remained on course for their worst session in nearly five months on Monday, hit by a plunge in energy stocks as crude prices retreated on a decision by the Organization of the Petroleum Exporting Countries and their allies (OPEC+) to boost output.

TSX Composite index came off its lows of the morning, but remained solidly in the red, 265.65 points, or 1.3%, to move into noon hour EDT at 19,719.89.

The Canadian dollar faded 0.91 cents to 78.34 cents U.S.

Lumber provider Interfor fell $1.88, or 7.2%, to $24.31, and the second-biggest decliner was miner First Quantum Minerals, down $1.39%, or 5.6%, to $23.25.

OceanaGold handed over gains and fell 2.5 cents, or 10.6%, to 21 cents, while Tricon Residential backpedaled 15 cents, or 1%, to $14.35, after the rental housing company announced a joint venture to acquire more than 18,000 single-family rental homes for about $5 billion.

ON BAYSTREET
The TSX Venture Exchange hurtled earthward 34.44 points, or 3.8 %, to 873.87.

All but two of the 12 TSX subgroups stayed negative, with energy plunging 3.7%, while materials lost 2.1%, and financials were poorer by 1.9%.

The two gainers were information technology, better by 0.8%, and health-care, inching up but 0.1%.

ON WALLSTREET

U.S. stocks fell aggressively Monday on concern a rebound in COVID-19 cases would slow global economic growth. The selling picked up as the session continued and the Dow Jones Industrial Average was currently headed for its biggest drop of the year.

The 30-stock index moved lower 817.16 points, or 2.4%, to pause for lunch Monday at 33,870.69, exceeding a 2% decline seen in late January.

The S&P 500 fell 77.37 points, or 1.8%, to 4,249.79, with energy and industrial sectors as the worst performers.

The NASDAQ faltered 167.1 points, or 1.2%, to 14,259.84.

COVID cases have rebounded in the U.S. this month with the delta variant spreading among the unvaccinated. The U.S. is averaging nearly 30,000 new cases a day in the last seven days ending Friday, up from a seven-day average of around 11,000 cases a day a month ago, according to data from the Centers for Disease Control. Cases were already flaring up around the world because of the delta variant.

Delta, United and American Airlines shares all lost more than 3%. Along with shares of cruise lines and airlines, key stocks linked to the global economy pulled back. Boeing lost 5%, General Motors and Caterpillar lost more than 2%.

Energy stocks were among the worst performers in the market, with with ConocoPhillips off by more than 3%. Exxon Mobil lost 3%.
Banks took a hit as yields fell, crimping their profitability prospects. JPMorgan and Bank of America each dropped about 2.5%.
Big Tech shares were not immune to the sell-off with Apple and Alphabet each down more than 2%.

Yet certain defensive stocks gained amid the market selloff. Walmart and Procter & Gamble shares traded into the green, along with many utilities stocks.

Despite Monday’s decline, the overall damage to the market remains tame. The S&P 500 is still just 3% below its record reached last week and investors are hoping more better-than-expected earnings results will put a bottom under the market.

A busy week of earnings is on deck, with nine Dow components set to report and 76 S&P companies will provide quarterly updates. United Airlines and American Airlines will report, as will social media companies Snap and Twitter. CSX, Johnson & Johnson, Coca-Cola, Honeywell, IBM, Intel and Netflix are also on the docket.

Prices for 10-Year Treasurys climbed, lowering yields to 1.20% from Friday’s 1.30%. Treasury prices and yields move in opposite directions.

Oil prices slid $4.72 to $67.09 U.S. a barrel.

Gold prices handed back $5.70 to $1,809.30 U.S. an ounce.