TSX Falls by Midday

Canada's main stock index fell on Tuesday, weighed down by financial stocks after Barclays downgraded several banks, while investors remained cautious ahead of U.S. inflation data due on Wednesday.

The TSX remained in the red 38.42 points by noon hour EDT to 20,546.73.

The Canadian dollar slumped 0.15 cents to 74.62 cents U.S.

Heavyweight financial index lost ground after Barclays downgraded three major Canadian banks. Royal Bank of Canada fell $2.28, or 1.7%, to $129.07, on Barclays' double downgrade to "underweight" from "overweight".

Bank of Nova Scotia fell $1.82, or 2.7%, to $65.46, and Toronto-Dominion Bank slumped $1.12, or 1.4%, to $81.19, on the brokerage's rating cuts.

Pet Valu Holdings fell $1.74, or 4.8%, to $34.18, after the retailer reported a decline in first-quarter profit versus a year earlier.

Finning International gained $1.89, or 5.5%, to $36.01, after the caterpillar equipment dealer posted better-than-expected first-quarter results.

Canada's technology sector slipped 0.1%, dragged down by a decline of $1.01, or 1.2%, in Shopify, to $85.12.

ON BAYSTREET

The TSX Venture Exchange slipped 2.02 points, to move into Tuesday afternoon at 617.97.

Six of the 12 TSX subgroups were negative by lunch time, weighed most by financials and real-estate, each stumbling 0.8%, and energy stocks, off 0.5%.

The five gainers were led by consumer staples, picking up 0.5%, while industrials and communications each climbed 0.3%.

Health-care stocks were unchanged at the midpoint of the session.

ON WALLSTREET

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Stocks were under pressure Tuesday, with regional bank shares retreating, as investors readied for key inflation reports due later in the week and progress on the U.S. debt limit.

The Dow Jones Industrials fell below the breakeven point 33.23 points, pausing for lunch hour at 33,585.46.

The S&P 500 index shed 14.99 points to 4,123.13.

The NASDAQ Composite sank 68.88 points to 12,188.03.

PacWest shares fell 6% after a volatile session in which the regional bank rose more than 3%.

Lucid, PayPal and Skyworks were all down after their quarterly reports were released. Meanwhile, Palantir jumped 14% on a strong earnings report and upbeat guidance.

President Joe Biden is set to meet with House Speaker Kevin McCarthy Tuesday afternoon at 4 p.m. Both sides have cautioned that the meeting is simply a chance to have a conversation, with definitive progress on raising the debt limit unlikely. Biden and McCarthy remain at odds over the House Speaker’s caveat that a deal on raising the debt ceiling be tied to spending cuts. Biden maintains raising the debt ceiling is non-negotiable.

Treasury Secretary Janet Yellen said Monday afternoon that failing to raise the debt ceiling would be an “economic catastrophe,” and regulators are not close to any policies that would limit short-selling regional bank stocks.

Prices for the 10-year Treasury inched up, lowering yields to Monday’s 3.52%. Treasury prices and yields move in opposite directions.

Oil prices lost $1.31 to $71.85 U.S. a barrel.

Gold prices surrendered 20 cents to $2,033.00 U.S. an ounce.