Futures Crumble After U.S. Downgrade

Futures tied to Canada's main stock index declined on Wednesday as investors were spooked after rating agency Fitch downgraded United States' top credit rating, prompting them to park their money in safe-haven gold, pushing the bullion prices higher.

The TSX gave back 93.71 points to conclude Tuesday at 20,532.93.

September futures sank 0.6% on Wednesday.

The Canadian dollar gave back 0.21 cents to 75.15cents U.S.

Thomson Reuters Corp, on Wednesday reported higher sales and operating profit in the second quarter, helped by strong performance at its "Big 3" segments: Legal Professionals, Corporates and Tax & Accounting Professionals.

Bausch + Lomb posted modestly better than expected second-quarter earnings on Wednesday after its new chief executive, Brent Saunders, took the helm in March.

Canada is set for an earnings-heavy week, as the world's biggest fertilizer producer Nutrien and solid waste services company Waste Connections are due to report quarterly results later in the day.

ON BAYSTREET

The TSX Venture Exchange turned downward 4.84 points Tuesday to 622.68.

ON WALLSTREET

U.S. stock futures fell Wednesday after Fitch downgraded the long-term rating for the U.S. and traders continued to assess the latest batch of second-quarter earnings results.

Futures for the Dow Jones Industrials dipped 106 points, or 0.3% to 35,651.

Futures for the S&P 500 fell 22.25 points, or 0.5%, to 4,579.

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Futures for the NASDAQ dumped 117.25 points, or 0.7%, to 15,699.50.

Fitch Ratings lowered the U.S.’s long-term foreign currency issuer default rating to AA+ from AAA Tuesday night, citing “expected fiscal deterioration over the next three years.”

Advanced Micro Devices rose 1% in extended trading after reporting better-than-expected quarterly results. Meanwhile, SolarEdge Technologies tumbled 12% after missing second-quarter revenue expectations.

Earnings season is more than halfway over with results coming in stronger than expected. Of the S&P 500 companies that have reported, about 82% have posted positive surprises, according to FactSet data. The earnings beats have added to bullish investor sentiment with stocks continuing this year’s recovery since the third quarter began.

CVS Health, Yum! Brands and Humana are set to report earnings before the open Wednesday.

Traders are also anticipating the July ADP jobs report Wednesday before the open. Economists polled by Dow Jones expect a 175,000 increase, which would be lower than the 497,000 rise in the prior month.

In Japan, the Nikkei 225 fell 2.3% Wednesday, while in Hong Kong, the Hang Seng regressed 2.5%.

Oil prices gained 72 cents to $82.09 U.S. a barrel.

Gold prices shone brighter $10.70 to $1,989.50 U.S. an ounce.