Stocks resumed their downward path by Monday’s close, weighed mostly by losses in energy stocks, as
The TSX Composite Index plunged 1,378.49 points, or 10.1%, to close Monday at 12,337.84
The Canadian dollar removed 1.03 cents at 71.46 cents U.S.
Canada's financial regulator is reducing the amount of capital lenders must hold to guard against risks to the lowest level on record, it said on Friday, as part of a series of measures to help gird against the economic impact of the COVID-19 pandemic.
Parliament rushed through ratification of the new U.S.-Mexico-Canada trade pact on Friday before taking a three-week break to help stop the spread of the coronavirus.
Ontario, which has reported more than 100 new coronavirus cases, said on Saturday it would limit testing for the respiratory illness until it can guarantee a more steady supply of swabs.
Energy stocks took the biggest hit, as ShawCor Ltd., lost 69 cents, or 38.1%, to $1.12, while Whitecap Resources slid 31 cents, or 22.3%, to $1.08.
Consumer discretionary stocks faded, as MTY Food Group fell $13.20, or 36.3% to $23.20, while Restaurant Brands International subsided $13.07, or 20.7%, to $50.01.
Among real-estate issues, Collier’s International dropped $19.37, or 20.4%, to $75.62, while SmartCentres dumped $4.99, or 19.9%, to $20.11.
Gold soldiered on, as Alamos Gold was boosted $1.13, or 20.8%, to $6.56, while Semafo jumped 37 cents, or 19.2%, to $2.30.
Materials such as Franco Nevada triumphed $14.14, or 11.6%, to $136.13, while First Majestic Silver hiked 75 cents, or 10.8%, to $7.69.
On the economic calendar, Canadian home sales rose 5.9% in February from the previous month, led by a jump in activity in the Greater Toronto Area, according to the Canadian Real Estate Association.
ON BAYSTREET
The TSX Venture Exchange sank 25.54 points, or 6.5%, to 365.56.
All but two of the 12 TSX subgroups fell on the session, with energy down 18.9%, while consumer discretionary sank 15%, and real-estate each tailed off 12.1%.
Gold gained 8.2%, and materials were better by 2.2%.
ON WALLSTREET
Stocks fell sharply Monday — with the Dow suffering its worst day since the “Black Monday” market crash in 1987 and its third-worst day ever — even after the Federal Reserve embarked on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak.
The Dow Jones Industrials collapsed 2,997.10 points, or 12.9 %, to 20.188.52.
The broader S&P 500 erased 324.89 points, or 12%, to 2,386.13.
The NASDAQ slipped 970.28 points, or 12.3%, to 6,904.59, its worst day ever.
Apple shares plunged by more than 8%. Airline stocks also fell broadly. Delta and United traded at least 10% lower while American lost about 8%.
Bank stocks took a hit, with Bank of America and JPMorgan Chase each dropping more than 12%. Morgan Stanley fell 10.6% while Citigroup dropped 14.4%. The big banks announced Sunday they were halting their buyback programs in an effort to provide capital where needed.
Monday’s losses put the Dow down 31.7% from its all-time high and the S&P 500 and NASDAQ more than 29% below their records last month. The Dow fell to its lowest point since 2017.
The Dow’s drop was the worst decline since its “Black Monday” crash three decades ago when it fell more than 22%. The drop surpassed its 9.99% tumble last Thursday. It was also the Dow’s third-worst day ever; it dropped more than 13% in late 1929.
Investors have been dumping equities amid worries the coronavirus will slow economic growth and take a bite out of corporate profits.
Economists at JPMorgan see negative growth for the first quarter while Goldman Sachs downgraded its first-quarter growth forecast to flat from 0.7%.
Trading was halted for 15 minutes shortly after the open as a then 8.14% drop on the S&P 500 triggered a so-called circuit breaker. It was the third time in the last week the circuit breaker was triggered.
Before the open, futures contracts tied to the major averages hit their “limit down” levels, meaning they could not trade below that threshold. Those limits — along with the regular session’s circuit breakers — are imposed by the exchanges to maintain orderly market behavior.
The Fed cut interest rates down to basically zero, their lowest level since 2015. The U.S. central bank also launched a massive $700-billion quantitative easing program
While the central bank’s actions may help ease the functioning of markets, many investors said they would ultimately want to see coronavirus cases peaking and falling in the U.S. before it was safe to take on risk and buy equities again.
However, the weekend’s news about the coronavirus outbreak was not helping sentiment. U.S. cases have jumped to 3,774 and 69 deaths, according to Johns Hopkins University. The U.S. Centers for Disease Control and Prevention urged organizers to cancel or postpone events with at least 50 people.
Prices for the 10-Year U.S. Treasury gained sharply, dropping yields to 0.75% from Friday’s 0.98%. Treasury prices and yields move in opposite directions.
Oil prices dumped $3.15 to $28.58 U.S. a barrel.
Gold prices dropped $15.00 to $1,501.70 U.S. an ounce.
