Stocks Head for Worst Session in Month

Equities in Canada’s largest centre fell by noon EST on Tuesday and were set for their worst session in nearly a month as weaker crude prices weighed on energy stocks, while worries over rising inflation hit the materials sector.

The S&P/TSX Composite came off its early morning gully, but remained in the minus category by 148.93 points to pause for lunch Tuesday at 18,267.81.

The Canadian dollar gained 0.09 cents to 79.39 cents U.S.

Aphria fell $2.40, or 9.9%, the most on the TSX, to $21.97, while the second-biggest decliner was Ballard Power Systems, down $2.63, or 6.9%, to $35.73.

The largest percentage gainer on the TSX was Thomson Reuters, which jumped $7.68, or 7.6%, to $108.94, after the news and information group posted a higher fourth-quarter revenue.

Its gains were followed by Equitable Group, which rose $9.04, or 7.3%, to $133.11, after multiple brokerages raised their price targets for the financial service provider’s stock.

ON BAYSTREET

The TSX Venture Exchange came off its lows of the morning, but off 45.31 points, or 4.2%, to reach noon hour at 1,037.65.

All but two of the 12 TSX subgroups were negative midday, with health-care stumbling 5.8%, information technology down 2.9%, and materials, slipping 2.5%.

The two gainers were financials, climbing 0.9%, and communications, eking up 0.2%.

ON WALLSTREET

Tech shares dropped for a second day on Tuesday in the face of higher interest rates and a rotation into stocks more linked to the economic recovery.

The Dow Jones Industrials dropped 124.45 points to 31,397.24.

The S&P 500 sank 27.33 points to 3,849.13,

The NASDAQ Composite slouched 254.24 points, or 1.9%, to 13,278.70, falling below its 50-day moving average, a key technical indicator, for the first time since Nov. 3.

Tech stocks, most vulnerable to higher interest rates, have sold off in recent days. Investors also rushed to book profits in these pandemic winners whose valuations have reached historically high levels.

Tesla traded 4% lower after sliding as much as 13% earlier, following a 9% decline in the previous session. Apple lost 1.7% after a 3% slide on Monday. The iPhone maker’s stock is down about 11% over the last month.

Stocks bounced off their lows after Fed Chair Jerome Powell’s prepared testimony to Congress said that inflation was “soft,” easing fears of a policy change by the central bank. Powell said price pressures remain mostly muted and the economic outlook is still “highly uncertain.”

Inflation fears have risen in recent weeks amid a sharp rise in bond yields as policymakers debate another round of economic relief as COVID cases decline. Investors fear that a spike in prices due to federal stimulus could force the central bank to raise short-term borrowing costs.

On the pandemic front, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week after a sweeping winter storm disrupted logistics. Gov. Andrew Cuomo said on Sunday that a New York resident has tested positive for the COVID-19 variant first identified in South Africa.

Prices for 10-Year Treasurys gained back ground, lowering yields to 1.35% from Monday’s 1.36%. Treasury prices and yields move in opposite directions.

Oil prices dipped 10 cents to $61.60 U.S. a barrel.

Gold prices slid $2.90 to $1,801.30