TORONTO — Canada's main stock index edged downward Wednesday as the price of oil receded off a strong morning, while U.S. markets slid by a wider margin.
The S&P/TSX composite index was down 81.23 points at 20,376.23.
In New York, the Dow Jones industrial average was down 613.89 points, or 1.8 per cent, at 33,296.96. The S&P 500 index was down 62.11 points, or 1.6 per cent, at 3,928.86,while the Nasdaq composite was down 138.10 points, or 1.2 per cent, at 10,957.01.
Before markets had opened, bond yields were already down on news that Japan’s central bank decided to maintain its grip on the yield curve, which came as a surprise to many, said David Stonehouse, senior vice-president and head of North American and specialty investments at AGF Investments Inc.
“The market had placed some expectation of a further step today,” he said. “When they didn't get it, bond yields fell, bond prices rallied in Japan and that cascaded overseas.”
Then the U.S. day started with a trio of lower-than-expected economic data prints, with retail sales, producer price inflation and industrial production all declining at a faster pace than the market was betting on, said Stonehouse.
This likely dashed some of the hope for a “sweet spot” soft landing that led a new-year rally, he said.
Expectations, low heading into the new year, were buoyed early on by promising economic data, but this new data seems to have taken a bite out of that optimism, he said.
Investors may also be doing some profit-taking after that rally, he added.
The TSX appeared less sensitive than U.S. markets to bond yields and economic data since it ended the day with a minor loss, but it still saw a decline during the day in line with the U.S., coming down from a morning rise on energy stocks, said Stonehouse.
The TSX's energy index rose to start the day but sloped downward as it progressed, ending down almost one per cent.
The Canadian dollar traded for 74.41 cents US compared with 74.68 cents US on Tuesday.
The March crude oil contract was down 65 cents at US$79.80 per barrel and the February natural gas contract was down 28 cents at US$3.31 per mmBTU.
The February gold contract was down US$2.90 at US$1,907 an ounceand the March copper contract was up a cent at US$4.23 a pound.
This report by The Canadian Press was first published Jan. 18, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
