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Trade War Tensions Still Weighs on Markets

The promise of Friday morning quickly dissipated for stocks in Canada’s largest market, as nerves over ...

The promise of Friday morning quickly dissipated for stocks in Canada’s largest market, as nerves over a possible trade war failed to pipe down.

The S&P/TSX Composite Index tumbled 176.19 points, or 1.1%, to close the day and week at 15,223.74

The Canadian dollar gained 0.37 cents at 77.7 cents U.S.

The financial sector was down after data showed inflation jumped to a three-year high in February, raising the prospect of an interest rate hike.

The Bank of Canada has a 2% target for inflation, and has raised interest rates three times since July 2017, with markets expecting another hike by this July.

Callidus Capital dropped 42 cents, or 5.9%, to $6.66, while Royal Bank fell $1.42, or 1.4%, to $99.22.

Techs suffered, as BlackBerry lost 54 cents, or 3.3%, to $16.03, while Constellation Software backtracked $10.03, or 1.2%, to $862.11.

Industrials were on the down side as well, with Boyuan Construction Group sliding seven cents, or 14%, to 43 cents, while Bombardier demurred three cents to $3.75.

Fears of retaliatory trade tariffs sent investors scrambling for safe assets such as gold, lifting stocks of miners Barrick Gold, up 41 cents, or 2.6%, to $16.12, and Goldcorp by 74 cents, or 4.3%, to $17.87.

Canopy Growth, gained $1.72, or 5.4% to $33.41, while Aurora Cannabis, progressed 48 cents, or 5% to $10.11

Among materials, First Energy Metals gained five cents, or 22.7%, to 27 cents.

On the economic front, Statistics Canada reported that the cost of living rose 2.2% on a year-over-year basis in February, following a 1.7% increase in January.

On a seasonally-adjusted monthly basis, the Consumer Price Index was up 0.2% in February after increasing 0.5% in January.

Elsewhere, retail sales increased 0.3% in January to $49.9 billion. General merchandise stores were the largest contributors to the increase

ON BAYSTREET

The TSX Venture Exchange stayed afloat 0.72 points to 824.62

All but three of the 12 TSX subgroups were negative on the day, as financials slumped 1.5%, information technology faded 1.4%, and industrials dipped 1.3%.

The three gainers were gold, up 3.2%, while health-care and materials each climbed 0.9%

ON WALLSTREET

Stocks fell sharply on Friday, adding to their steep weekly losses, as investors assess the possibility of a trade war brewing between the U.S. and China.

The Dow Jones Industrial Average wilted 424.6 points, or 1.8%, to end Friday at 23,533.20, with DowDuPont as the worst-performing stock. The 30-stock index also closed in correction, down 11.6% from its 52-week high.

The S&P 500 slumped 55.43 points, or 2.1%, to 2,588.26, with financials pulling back 3%. It also closed just outside correction territory.

The NASDAQ composite Index fell 174.01 points, or 2.4%, to 6,992.67

Week to date, the major averages posted their worst week since January 2016. The Dow faltered 5.7%, and the S&P 500 dropped 5.9%, while the NASDAQ pulled back 6.5%.

In corporate news, shares of Dow-component Nike rose slightly after the apparel company reported better-than-expected earnings. Nike got a boost from sales in Greater China, which rose 24% during the third quarter.

Tech has also put the broader market under pressure this week as shares of Facebook dropped 13.8% in that time period. Facebook dropped sharply this week on news that Cambridge Analytica gathered data from 50 million Facebook profiles without the permission of its users. On Friday, the stock fell 3.3%.

Bank stocks have also been under pressure. Bank of America pulled back 4.5%.

Donald Trump pressed ahead with long-promised anti-China charges on Thursday. The U.S. president signed an executive memorandum that will impose tariffs on up to $60 billion in Chinese imports.

In response, China's commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website posted Friday morning. Beijing's ministry said it will take measures against the 128 U.S. goods in two stages if it cannot reach an agreement with Washington, adding that it could also take legal action under World Trade Organization rules.

Prices for the benchmark 10-year Treasury note gained slightly, lowering yields to 2.82% from Thursday’s 2.83%. Treasury prices and yields move in opposite directions.

Oil prices leaped $1.62 a barrel to $65.92 U.S.

Gold prices strengthened $20.00 to $1,347.40 U.S. an ounce.