Equities Shed Some Strength over COVID Uncertainty

Stocks in Toronto decreased by the end of the session on Tuesday, dragged down by mining and oil companies ahead of the release of plans on domestic fiscal spending and a U.S. monetary policy decision.

The S&P/TSX Composite dumped 99.88 points by the closing bell Tuesday to 20,648.57.

The Canadian dollar slid 0.31 cents at 77.77 cents U.S.

Energy proved the biggest albatross round the markets’ neck, with Crescent Point Energy pointed downwards 40 cents, or 6.2%, to $6.05, while Whitecap Resources trudging 33 cents, or 4.5%, to $7.09.

In techs, Nuvei Corporation stuttered $5.95, or 8%, to $68.69, while Alithya Group ditched 13 cents, or 4%, to $3.16.

In the gold field, Seabridge Gold lost 72 cents of its lustre, or 3.4%, to $20.79, while Novagold gave up 30 cents, or 3.3%, to $8.86.

Industrials tried to level out the field, Canadian Pacific chugged ahead $3.46, or 3.8%, to $93.73, while Canadian National bettered itself by $1.15, to $162.03.

In the utility sector, Emera gained $1.15, or 1.9%, to $61.07, while ATCO Ltd. took on 62 cents, or 1.5%, to $41.70.

COVID-19 cases in Canada could see a swift rise in the days to come due to community spread of Omicron, mirroring the situation in Ontario.

Prime Minister Justin Trudeau's government will outline new fiscal and economic forecasts in a document to be released Tuesday as inflation surges and as business groups and opposition politicians call for more spending restraint.

The Bank of Canada on Monday unveiled an agreement with the federal government to keep its inflation target unchanged at 2%, adding that it would now take labour market factors into account as well, which could keep interest rates low for longer in times of crisis.

ON BAYSTREET

The TSX Venture Exchange faded 15.92 points, or 1.8%, to 877.66.

All but two of the 12 TSX subgroups were lower on the day, as energy turfed 1.5%, information technology backpedaled 1.2%, and gold lost 0.7%.

The two gainers were industrials, up 0.4%, and utilities, better by 0.2%.

ON WALLSTREET

U.S. stocks fell on Tuesday as some large tech stocks moved lower and new inflation data continued to show a sharp rise in prices.

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The Dow Jones Industrials dumped 106.77 points to 35,544.18,

The S&P 500 index lost 34.88 points to 4,634.09.

The NASDAQ came off its lows of the day, but still suffered 175.64 points at 15,237.64.

Tech stocks were a main source of weakness on Tuesday, though the sector trimmed its losses in afternoon trading. Microsoft was a major drag on the market averages, falling more than 3%. Fellow software stock Adobe dropped 6.6%.

Elsewhere, automaker Ford slid 1.9% following news that by 2030 Toyota would be investing $35 billion into battery-powered electronic vehicles, a space where Ford has sought to establish itself as a leader. Tesla shares fell 0.8% after CEO Elon Musk announced that that he has sold another $906.5 million in shares.

On the positive side for the market, major bank stocks rose along with interest rates, with Goldman Sachs and Bank of America each adding more than 1%. Regional banks and energy stocks also outperformed.

On the COVID front, Pfizer announced that its drug aimed at treating patients with the virus proved effective in a final analysis, including against the new omicron variant. However, the World Health Organized warned on Tuesday that the new variant appeared to be spreading faster than previous versions of the virus.

The downfall for stocks comes after the November reading for the producer price index showed a year-over-year increase of 9.6%, the fastest pace on record and above the 9.2% expected by economists, according to Dow Jones. The index rose 0.8% month over month, above the 0.5% expected.

The hotter-than-expected inflation reading comes as the Federal Reserve also kicks off its two-day meeting on Tuesday. The central bank will release a statement on Wednesday with quarterly projections for the economy, inflation and interest rates. Chairman Jerome Powell will also hold a press conference.

Prices for 10-year Treasurys fell a bit, raising yields to 1.44% from Monday’s 1.42%. Treasury prices and yields move in opposite directions.

Oil prices unloaded 90 cents to $70.39 U.S. a barrel.

Gold prices let go of $16.40 to $1,771.90 U.S. an ounce.