Stocks Continue Plunge

Canada’s main stock index fell to a near-one-year low on Thursday, a day after descending into correction territory, as weakness in mining shares and downbeat earnings from Manulife Financial weighed on sentiment.

The negative trend for the S&P/TSX, as it dived another 219.88 points, or 1.1%, midday to 19,617.37.

The Canadian dollar removed 0.31 cents at 76.65 cents U.S.

On Wednesday, the Canadian benchmark index fell to its lowest level since last July, taking its losses since the March 29 closing record high to 10.2%. A correction is confirmed when an index closes 10% or more below its record closing level.

Manulife fell $2.42, or 9.9%, to $21.93.

Sun Life Financial ditched $1.75, or 2.8%, to $60.97, after the insurers on Wednesday reported core earnings fell from a year ago as the COVID-19 pandemic took a toll on their Asian earnings, with Manulife also missing estimates.

ON BAYSTREET

The TSX Venture Exchange stumbled 17.43 points, or 2.5%, to 683.47.

Eight of the 12 TSX subgroups were in minus country in the first hour, with materials giving up 2%, while gold lost 1.9% of its lustre, and financials were poorer by 1.6%.

The four gainers were led by consumer discretionary stocks, up 0.8%, while consumer staples and information technology each jumped 0.6%.

ON WALLSTREET

Stocks fell on Thursday after a failed attempt to bounce back from the session’s earlier losses.

The Dow Jones Industrials fell 318.77 points, or 1%, to 31,515.34.

The S&P 500 slid 37.29 points, or 1%, to 3,897.89.

The NASDAQ Composite dropped 85.85 points to 11,282.60.

Those moves came a day after the S&P 500 closed at its lowest level since March 2021, and the Dow posted its fifth straight day of losses.

Markets once again struggled to pick a direction on Thursday as the major indices wavered between sharp gains and losses.

Some heavily shorted names rallied in trading on Thursday. While it was unclear what was driving gains from Lucid, Zoom, GameStop and AMC, it could mean a short squeeze was taking place, where hedge funds that have profited from the steep losses in overvalued pandemic winners this year were finally closing out their short positions by buying back the shares.

Short selling is a tactic where funds sell shares that are borrowed from investment banks and so in order to close the trade they need to buy the stocks and return them. A short squeeze is a rally that results from that buying.

Shares of Lucid jumped 14.4% and Zoom popped 3.4%. GameStop added 15.3% and AMC, jumped 16.5%. Rivian Automotive also soared 22% on Thursday after reporting its latest quarterly results. Carvana, which hit a two-year low earlier in the session, surged more than 41%.

Shares of Big Tech names such as Amazon picked up 4.3% and Netflix gained 5.3%, while Tesla advanced 2.8%. The consumer discretionary sector, which has been hard-hit by the recent selloff also added 2%

Meanwhile, Disney shares fell to a two-year low and were last down 0.6%. The media giant reported higher-than-expected streaming subscriber growth, but warned about the COVID impact on parks in Asia.

Fresh producer price index data, which measures prices at the wholesale level, rose 11% year over year. That number fell from March but came in above expectations and did little to shake fears of rising inflation.

Treasury prices gained sharply, with yields slumping to 2.85% from Wednesday’s 2.93%. Treasury prices and yields move in opposite directions.

Oil prices nicked ahead 38 cents at $106.09 U.S. a barrel.

Gold prices tumbled $19.30 to $1,834.40 U.S. an ounce.

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