TORONTO — Canada’s main stock index was relatively flat Thursday ahead of next week’s start to eagerly anticipated second-quarter earnings results.
The S&P/TSX composite index closed down 60.55 points at 15,568.64 for a swing of 257 points between high and low.
In New York, the Dow Jones industrial average was down 361.19 points at 25,706.09. The S&P 500 index was down 17.89 points at 3,152.05, while the Nasdaq composite was up 55.25 points to a record close of 10,547.75 after hitting a record intraday high of 10,578.10.
“It’s just one of those days in the summertime where we’re seeing a modest correction but nothing big,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
“I think we’re just seeing some backfilling and maybe a little bit of profit-taking while people wait to see what happens with earnings next week.”
The second quarter results are expected to be very weak compared with a year ago because of the impact of the COVID-10 pandemic.
In addition to U.S. bank earnings starting the quarterly results, there will be more economic numbers and central bank meetings, including the Bank of Canada.
“This has kind of been an in-between week in general where the newsflow has been pretty light on both corporate and economics but that all changes significantly next week,” he said in an interview.
The Dow dropped on weak results from the Walgreens pharmacy chain. Despite higher health-care spending related to the virus, the company said it was hurt by the cancellation of elective surgeries, fewer routine doctor visits and a decline in prescriptions.
“In general, we may be starting to see a bit of a rethinking towards the health-care sector in terms that there might be the possibility that there’s winners and losers that could become more apparent in the next round of earnings,” Cieszynski said.
“I suspect you’d probably see the same kind of thing at places like (Loblaw-owned) Shopper’s Drug Mart. I don’t think overall it’s specific to Walgreens. I think it’s more indicative of a wider shift in consumer spending.”
Seven of the 11 major sectors on the TSX were down, led by declines in energy and the heavyweight financials.
Energy lost two per cent as crude oil prices dipped below US$40 a barrel to its lowest closing of the month and natural gas dropped. Seven Generations Energy Ltd. was down 4.9 per cent while Canadian Natural Resources was 2.6 per cent lower and Suncor Energy Inc. decreased 2.5 per cent.
The August crude contract was down US$1.28 at US$39.62 per barrel and the August natural gas contract was down 4.5 cents at nearly US$1.78 per mmBTU.
Financials lost 1.3 per cent as shares of the Toronto-Dominion and Laurentian banks each fell about 2.6 per cent.
Materials gained even as the price of gold fell from its nine-year high, but still remained above US$1,800 an ounce. Copper continued to rise to reach its highest level in nearly six months.
The August gold contract was down US$16.80 at US$1,803.80 an ounce and the September copper contract was up 1.45 cents at nearly US$2.84 a pound.
The Canadian dollar traded for 73.77 cents US compared with 73.87 cents US on Wednesday.
Technology got a boost from Shopify Inc. while industrials and consumer staples were also up.
Markets appeared to be little affected by continuing increases in COVID infections in the U.S., good Canadian housing starts and a further drop in U.S. jobless claims.
Canadian housing starts beat expectations by reaching 211,000 annualized in June.
Jobless claims increased by 1.31 million, better than forecasts and down from 1.43 million a week earlier. Continuing claims fell to 18 million from 18.76 million a week earlier.
This report by The Canadian Press was first published July 9, 2020.
Companies in this story: (TSX:VII, TSX:CNQ, TSX:SU, TSXL, TSX:SHOP, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press