Stocks Start Day Negative

RBC in Focus

Equity indexes in Canada’s largest market retreated on Tuesday, weighed by energy shares, as investors worried about the pace of a post-pandemic economic rebound following a surge in U.S. coronavirus cases.

The S&P/TSX Composite Index dipped 26.63 points to begin trading Tuesday at 15,643.04.

The Canadian dollar shed 0.2 cents at 73.66 cents U.S.

Moody's Investors Service is expecting Canadian provinces to shift rapidly to stabilizing their rising debt burdens once economic growth resumes, which analysts said could be a signal to provinces on how they can avoid downgrades.

Royal Bank of Canada said Monday it is committing $150 million to racial diversity initiatives and aims to increase the proportion of non-white executive hires to 30% from 20%. Royal Bank shares slid 66 cents to $92.75.

Credit Suisse raised the target price on Norbord to $30.00 from $20.00. Norbord advanced 83 cents, or 2.6%, to $33.32.

Credit Suisse raised the target price on Canadian Pacific Railway to $285 from $242. CP shares rumbled along $5.72, or 1.7%, to $350.37.

On the economic docket, Western University’s Ivey Purchasing Managers Index rocketed in June to 58.2, far above the reading of 39.1 in May, and even outdistancing the 52.4 level for June 2019.

ON BAYSTREET

The TSX Venture Exchange gained 4.96 points to 649.95.

The 12 TSX subgroups were evenly divided in the first hour, with gold better by 1.2%, information technology stronger 1.1%, and materials improving 0.9%.

The half-dozen laggards were weighed down mostly by energy, descending 2.1%, while health-care and financials each collapsed 1.1%.

ON WALLSTREET

The NASDAQ Composite rose on Tuesday, recovering from a decline earlier in the session, as shares of major tech companies such as Microsoft and Apple outperformed.

The Dow Jones Industrials gave back 151.7 points of Monday’s gains to open Tuesday at 26,135.33.

The S&P 500 fell 2.77 points to 3,176.95.

The NASDAQ Composite gained 42.81 points to 10,476.46, yet another new record high.

Microsoft shares gained 1.6% to hit an all-time high. Apple also reached record levels, climbing 1.1%. Facebook took on 2%, and Netflix gained 0.6% to trade at all-time highs as well.

Positive news on the coronavirus front also gave stocks a boost. The U.S. government awarded drugmaker Novavax a $1.6 billion contract to develop a coronavirus vaccine, the biggest amount yet granted under the White House’s “Operation Warp Speed.” Novavax shares were up 34%.

To be sure, market sentiment was kept in check as stocks tied to the economy reopening from the coronavirus shutdowns were lower.

Norwegian Cruise Line and Carnival Corp were lower by about 2% each. American Airlines and United Airlines both fell more than 2%.

The market continued to shrug off on Monday a continuous rise in coronavirus cases across the U.S. The number of people hospitalized with COVID-19 grew by 5% or more Sunday in 23 states, including Texas, which reported a record of more than 8,000 hospitalizations on Sunday.

California Gov. Gavin Newsom on Monday asked six additional counties to close their indoor businesses.

Prices for the 10-Year Treasury fell, raising yields to 0.68% from Monday’s 0.67%. Treasury prices and yields move in opposite directions.

Oil prices recovered 17 cents to $40.80 U.S. a barrel.

Gold prices added $13.70 to $1,807.20 U.S. an ounce.