Canada's main stock index hit a two-month low on Monday, with banks and energy stocks leading declines, as global investors turned away from riskier assets on worries about the abrupt shutdown of Silicon Valley Bank (SVB).
The TSX came off its lows of the morning, but still trailed breakeven by 60.74 points, to reach noon hour EDT Monday at 19,714.18. Daylight Saving Time kicked in throughout much of North America on the weekend.
The Canadian dollar stormed ahead 0.47 cents to 73.09 cents U.S.
A Canadian banking regulator on Sunday said it was taking temporary control of the beleaguered bank's unit in
the country.
The TSX has shed most of its year-to-date gains on the back of recent underperformance in banks and commodity-linked stocks. The index is now up just 1% so far this year.
ON BAYSTREET
The TSX Venture Exchange was negative 1.54 points to 609.05.
The 12 TSX subgroups were evenly divided between gainers and losers, as energy tumbled 1.9%, financials were down 1.4%, and consumer discretionary stocks faltered 1.1%.
The half-dozen gainers were led by gold, soaring 5.8%, materials, strengthening 2.6%, and utilities, up 1.4%.
ON WALLSTREET
Stocks whipsawed on Monday as traders assessed a plan to backstop all the depositors in failed Silicon Valley Bank and make additional funding available for other banks.
The Dow Jones Industrials shook off the negative of the morning and climbed 210.93 points to 32,120.57, after four straight days of losses.
The S&P 500 regained 30.78 points to 3,891.97.
The NASDAQ Composite popped 162.85 points, or 1.5%, to 11,301.74.
Bank stocks remained under pressure following last week’s slide, with JPMorgan Chase and Citigroup falling. Regional banks fell even more, led by a 70% drop in First Republic.
But investors bought up other areas of the market outside of banks, such as some technology stocks like Apple and defensive names including Johnson & Johnson and Eli Lilly, were able to advance.
All Silicon Valley Bank depositors will have access to their money starting Monday, according to a joint statement from the Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation.
The Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding deposits. The facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions.
President Joe Biden said shortly before the market opened on Monday that Americans can trust the U.S. banking system.
Elsewhere, investors are watching various economic reports this week. Tuesday’s consumer price index report is the last major inflation data release ahead of the Fed’s next meeting, ending March 22. February retail sales and the producer price index are also on deck.
Prices for the 10-year Treasury rose sharply, lowering yields to 3.53% from Friday’s 3.69%. Treasury prices and yields move in opposite directions.
Oil prices erased a dollar to $75.68 U.S. a barrel.
Gold prices hiked $44.20 to $1,911.40 U.S. an ounce.
