Canada’s main stock index fell in early trade on Tuesday, as there was a selloff in the heavyweight energy sector after U.S. oil futures sank into negative territory.
The S&P/TSX Composite Index picked up 28.4 points to end Monday at 14,388.28.
The Canadian dollar ditched 0.40 cents to 70.80 cents U.S.
Teck Resources Ltd reported a much bigger-than-expected 84% plunge in quarterly profit, hit by shutdowns due to the coronavirus outbreak and weak performance in its energy unit. Teck shares lost six cents to $10.52.
Enbridge said on Monday it would not ration capacity for May on North America’s biggest oil pipeline network, as Canada’s oil producers deepen production cuts to cope with low prices and weak demand. Enbridge shares dipped 78 cents, or 1.9%, to $40.62.
JP Morgan raised the target price on Fortis to $57.00 from $55.00. Fortis shares lost four cents to $53.94.
CIBC cut the target price on Linamar to $40.00 from $43.00. Linamar subsided $1.60, or 4.9%, to $31.01.
RBC cut the rating on Stingray Group to sector perform from outperform. Stingray shares sank 18 cents, or 3.8%, to $4.51.
Economically speaking, Statistics Canada said retail sales rose for the fourth consecutive month, up 0.3% to $52.2 billion in February.
ON BAYSTREET
The TSX Venture Exchange fell 6.53 points, or 1.5%, to 438.23.
All but two of the 12 TSX subgroups were negative, with energy tumbling 1.7%, financials off 1.6%, and materials down 1.2%.
The two gainers were information technology, surging 1.7%, and consumer staples, eking up 0.02%.
ON WALLSTREET
U.S. stocks fell sharply once again on Tuesday as oil prices continued their unprecedented wipeout.
The Dow Jones Industrials let go of another 375.8 points, or 1.6%, to 23,274.64.
The S&P 500 shook off 43.22 points, or 1.5%, to 2,780.92.
The NASDAQ Composite dropped 129.22 points, or 1.5%, to 8,428.17.
Not helping sentiment were shares of IBM, which slipped 6.1% after the company reported a 3.4% decline in revenue in the first quarter from a year ago amid the spread of coronavirus. Coca-Cola, Netflix, and Chipotle are on deck to report earnings on Tuesday.
Traders were focused on the strange happenings with oil futures once again, which raised concern about deep losses for the energy industry hitting the U.S. economy even further.
On Monday, the May contract for oil futures expiring Tuesday fell to zero and then went to an actual negative price, meaning producers would pay for someone to take the oil off their hands. The bizarre move has to do with the fact that because of the coroanvirus shutdowns, big buyers of oil like refineries don’t need any more oil because their tanks are nearly filled.
President Donald Trump tweeted he instructed the Energy and Treasury departments to “formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future.”
Earlier Monday, the Senate failed to reach a deal on the next package to rescue an economy and health care system ravaged by the global pandemic. However, a vote is set up as soon as Tuesday afternoon to replenish a key small business aid program. Sen. Chuck Schumer said Tuesday a deal was likely on that front.
Prices for the 10-Year Treasury gained ground, lowering yields to 0.56% from Monday’s 0.62%. Treasury prices and yields move in opposite directions.
Oil prices removed $5.08 to $15.35 U.S. a barrel.
Gold prices improved $17.80 to $1,693.40 U.S. an ounce.