TORONTO (CP) — The Toronto stock market narrowly avoided a second triple-digit loss in as many days Tuesday as oil prices continued their recent retreat.
The Toronto Stock Exchange’s S&P/TSX composite index ended the day down 91.30 points at 13,699.60 after plunging almost 163 points on Monday.
In New York, markets retreated in the face of some disappointing earnings results. The Dow Jones industrial average closed 41.62 points lower at 17,581.43, while the broader S&P 500 lost 5.29 points to 2,065.89 and the Nasdaq fell 4.55 points to 5,030.15.
Sid Mokhtari, market technician at CIBC world markets, said investors are looking for safe haven stocks such as banks and utilities as a year of volatility comes to an end.
“They want to focus on, ‘where am I not going to blow up?'” he said.
In earnings news, Ford shares dropped more than five per cent as the automaker reported improved sales of its new F-150 pickup truck, but offered up net income figures that fell short of Wall Street estimates. Meanwhile, UPS shares slumped almost three per cent after the package delivery company surprised investors by saying its revenue dipped in the third quarter.
On commodity markets, the December contract for benchmark crude oil ended trading down 78 cents at US$43.20 a barrel.
Mokhtari said the oil market is being squeezed on both sides, as demand falls in an environment of anemic growth.
“The assumption for the supply side is not that great either,” he said. “We still have oversupply built up.”
December gold lost 40 cents to US$1,165.80 an ounce and December natural gas rose 0.8 cents to US$2.361 per mmBtu.
The commodity markets, Mokhtari said, have been hit by faltering global growth in China and Europe.
“If global growth is not picking up then you’re not going to be picking up demand for resources,” he said.
The commodity-sensitive loonie gave back 0.59 of a U.S. cent to end the day at 75.38 cents U.S.
Traders were also awaiting the outcome of the two-day policy rate meeting of the Federal Reserve, which began on Tuesday. The U.S. central bank is not expected to raise rates when it makes its announcement on Wednesday, but remarks by Fed officials on the state of the halting U.S. economic recovery will be carefully dissected by the market for clues as to when rates may rise.
Mokhtari said the Fed seems likely to raise rates in the near term, while Canada has cut rates twice this year, and that means the Canadian dollar will stay cheap relative to the greenback.
“We are at a disadvantage relative to the US, primarily because of the interest rate differential,” he said.
Historically low American interest rates, at near zero since December 2008, have been credited with providing some of the liquidity that has fuelled markets since the Great Recession.
The Canadian Press
