Equity markets in Canada’s largest centre fell on Monday as last week's crude-induced rally fizzled out and a fall in oil prices weighed on energy companies and financial shares.
The S&P/TSX composite index plummeted 155.26 points or 1.3%, to greet noon Monday at 12,234.32
The Canadian dollar slid 0.65 cents to 70.14 cents U.S.
Royal Bank of Canada fell 1.6% to $68.24, and Toronto-Dominion Bank declined 1.8% to $50.76. Insurer Manulife Financial Corp lost 2.6% to $18.23.
Oil prices fell 3% as Iraq announced record-high oil production feeding into a heavily oversupplied market, wiping out much of the gains made in one of the biggest-ever daily rallies last week.
Suncor Energy Inc declined 1.8% to $30.78 and Canadian Natural Resources fell 2.2% to $25.50.
The oil price rout and related Canadian dollar slide is starting to hurt corporate profits, from rail and retail to seemingly unrelated sectors like telecoms.
Earnings are projected to fall by 28.3% in 2016 compared to a year ago, sources say.
Eldorado Gold Corp slumped 13.3% to $2.80 after it said it expects to write down the value of its assets in Greece by $1.2-$1.6 billion after suspending most operations there.
ON BAYSTREET
The TSX Venture Exchange stayed positive 0.09 points to 483.76.
All but three of the 13 TSX subgroups dwindled by noon hour, as metals and mining stocks faded 3.7%, energy swooned 3.2%, and financials were off 2%.
The three gainers were gold, shining brighter 3.3%, health-care, up 1.2%, and consumer staples, better by 0.7%.
ON WALLSTREET
U.S. stocks traded lower Monday as a renewed decline in oil prices weighed amid some major earnings reports, ahead of the Federal Reserve meeting later in the week.
The Dow Jones industrial average fell 74.58 points to 16,018.93, with Caterpillar one of the greatest contributors to declines on the index. Goldman Sachs traded more than 2.5% lower to also weigh on the Dow.
The S&P 500 dipped 12.65 points to 1,894.25, as energy fell more than 2% as the index’s greatest decliner
The NASDAQ index erased 23.31 points to 4,567.87.
Caterpillar dipped more than 4% in late-morning trade. Goldman Sachs downgraded the heavy equipment maker's stock to "sell" from "neutral" on expectations of lower returns on capital amid lower global infrastructure investment.
McDonald's halved gains after briefly jumping 2.5% in morning trade to top $121.00 U.S. a share and hit a record high in intraday trade.
The firm said global same-restaurant sales rose a better-than-expected 5%, helped by the launch of all-day breakfasts in the United States and recovering demand in China. U.S. sales increased 5.7%.
Halliburton reported earnings seven cents above estimates on revenue slightly below forecasts, but the oilfield services giant was able to benefit from cost cuts amid falling oil prices. The stock held about 1% higher in morning trade.
D.R. Horton posted earnings that topped expectations, with revenue also above estimates. Sales orders were up 9% from a year earlier, with the value of those orders rising by 12%. The stock fell more than 3.5% in morning trade.
Shares of Kimberly-Clark declined 4% in morning trade after the firm reported quarterly results that missed slightly on both earnings and revenue, noting impact from unfavorable foreign currency trends. Organic sales did rise by 5%.
In other corporate news, Johnson Controls, a U.S. maker of car batteries and heating and ventilation equipment, said it would merge with Ireland-based fire protection and security systems maker Tyco International. Shares of Johnson Controls held about 1% lower, while Tyco jumped more than 9% in late-morning trade.
Earnings due later this week include Apple, Facebook, Amazon.com and Microsoft.
No major economic data was expected Monday. The Dallas Fed January manufacturing production index came in at negative 10.2 versus 12.7 in December. The business activity index was minus 34.6 versus minus 21.6 the previous month.
Prices for the 10-year Treasury grew slightly, lowering yields to 2.02% from Friday’s 2.06%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.61 a barrel to $30.58 U.S.
Gold prices recovered $8.68 to $1,106.63 U.S. an ounce.
