Rough Wednesday for Stocks

Stocks in Canada’s biggest centre fell sharply on Wednesday after data showed the domestic economy shrank a record 9% in March from February and as the central bank warned the coronavirus outbreak was set to trigger the biggest near-term economic downturn.

The S&P/TSX Composite Index dumped 299.85 points, or 2.1%, to conclude Wednesday at 13,958.58

The Canadian dollar dropped 1.07 to 70.95 cents U.S.

Vermilion Energy fell 94 cents, or 15.8%, to $5.02, and shares of Secure Energy Services retreated 24 cents, or 18.3%, to $1.07.

Financials got roughed up, with ECN Capital plunging 26 cents, or 7.1%, to $3.40, while Home Capital Group fell $1.16, or 6.8%, to $15.82.

Among health-care concerns, Extendicare slid 32 cents, or 5.2%, to $5.85, while Aurora Cannabis headed downward five cents, or 4.8%, to one dollar.

The one group with good news was in consumer staples, where Alimentation Couche-Tard soared $1.62, or 4.5%, to $37.75, while Empire Company ballooned $1.33, or 4.5%, to $30.70.

Economically speaking, Statistics Canada, in a flash estimate, said the coronavirus outbreak forced a shutdown of economic activity resulting in a monthly decline in gross domestic product (GDP) which would be the most since the series started in 1961.

Elsewhere, the Canadian Real Estate Association reported that home sales recorded over Canadian MLS Systems dropped by 14.3% in March compared to February, as the economic turmoil and physical distancing rules surrounding the COVID-19 pandemic caused both buyers and sellers to increasingly retreat to the sidelines over the second half of the month.

The Bank of Canada today maintained its target for the overnight rate at 0.25%, which the Bank considers its effective lower bound. The Bank Rate is correspondingly 0.5% and the deposit rate is 0.25%. The Bank also announced new measures to provide additional support to Canada’s financial system.

ON BAYSTREET

The TSX Venture Exchange dipped 2.54 points to 442.71

All but one of the 12 TSX subgroups lost ground, as energy fell 5.6%, financials ditched 3.1%, and health-care dipped 2.7%

The lone gainer was in consumer staples, up 1.1%.

ON WALLSTREET

Stocks fell sharply on Wednesday as dismal economic data and weak bank earnings fueled concerns over the coronavirus’s impact on the U.S. economy.

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The Dow Jones Industrial came off its lows of the day, but still suffered a loss of 445.41 points, or 1.9%, to 23,504.35.

The S&P 500 sank 62.7 points, or 2.2%, to 2,783.36, Both the Dow and S&P 500 had their worst session since April 1.

The NASDAQ Composite went south 122.56 points, or 1.4%, to 8,393.18.

Bank of America traded more than 6% lower on the back of disappointing earnings. Citigroup fell more than 5%. Energy and financials were the worst-performing sectors in the S&P 500, dropping more than 4% each.

Retail sales during the month of March plunged a record 8.7%, according to a report from the Commerce Department published Wednesday. That was the largest one-month decline since the department began tracking the series in 1992.

Grocery stores, pharmacies and other retailers of essential goods saw a surge in demand last month amid the outbreak, the government said. But sales at a variety of other businesses — such as gas stations, auto dealerships, and restaurants — swooned as state governments shuttered commerce in an effort to slow the virus.

Bank of America said its first-quarter profit fell 45% as its loan-loss reserves grew by $3.6 billion because of the coronavirus outbreak.

Goldman Sachs shares dipped more than 3% after the bank reported a 46% decline in first-quarter profit as the coronavirus whacked performance in its asset-management division.

Citigroup, too, said it saw first-quarter income slide 46% as it set more funds aside to protect itself from potential missed payments from borrowers and other loan holders.

President Donald Trump said Tuesday that he believes some states will be able to lift the strict social distancing measures that have strained their economies before the end of April.

Prices for the 10-Year U.S. Treasury vaulted, lowering yields to 0.64% from Tuesday’s 0.75%. Treasury prices and yields move in opposite directions.

Oil prices recovered 23 cents to $20.34 U.S. a barrel.

Gold prices retreated $24.10 to $1,744.80 U.S. an ounce.