North American stock indexes slipped Tuesday for a fourth day in a row amid weak corporate earnings and continued nervousness about the impact of Donald Trump’s presidency on financial markets.
In Toronto, the S&P/TSX composite index was down 19.16 points at 15,385.96, as industrials and financials stocks took the biggest hit. A 2.51% in gold stocks and a 1.48% gain in utilities stocks helped pare some of the losses.
Fast-casual restaurant chain Freshii debuted its initial public offering on the Toronto stock market, pricing shares at $11.50 per and raising total gross proceeds of $125 million. Shares closed at $12.22, up 72¢ or 6.3%.
South of the border, the Dow Jones industrial average fell 107.04 points at 19,864.09. The S&P 500 dropped 2.03 points at 2,278.87 and the Nasdaq composite was barely changed, adding 1.08 points at 5,614.79.
The Canadian dollar gained 0.63 of a U.S. cent to US76.85¢ amid a falling greenback.
The lower U.S. dollar also helped drive up the April gold contract, which added US$15.40 at US$1,211.40 an ounce.
Colum McKinley, a vice-president of Canadian equities at CIBC Asset Management, says it’s safe to assume that equity and currency markets will continue to be volatile as U.S. President Trump continues to roll out his administration’s new policy positions.
“Given the moves we’ve seen in stocks over the number of years and company valuations we see today, it creates an environment where people will be quick to react,” he said.
McKinley added it’s important to remember that despite the market volatility, signs continue to emerge that the Canadian and U.S. economies are growing.
Statistics Canada reported that real domestic product grew by 0.4% in November, slightly above expectations. The improvement was due to strength in a broad number of sectors including manufacturing, finance, insurance, construction, and mining, quarrying and oil and gas extraction.
“After living through… one of the longest most drawn out economic recoveries, all of a sudden, there are more green shoots that investors could look to that says company earnings profiles are simply getting better,” he said.
In other commodities, the March crude contract gained US18¢ at US$52.81 per barrel, March natural gas fell US12¢ at US$3.12 per mmBTU, and March copper added US7¢ at US$2.73 a pound.
In corporate news, shares of athletic apparel maker Under Armour plunged more than 25%, or US$7.45, after the company released a disappointing fourth-quarter report, which included higher expenses.
Under Armour also issued a weak full-year forecast and said its chief financial officer is leaving. The stock tumbled to US$21.49. It dropped 30% last year and is now trading at its lowest price in two years.
Drug companies jumped after Trump said he wants less regulation on prescription drugs because that could speed up drug approvals.
While Trump again said he wants to reduce drug prices, investors seemed pleased with proposals that could lower drugmakers’ costs and boost their profits. Just three weeks ago, Trump had said drugmakers were “getting away with murder” on prices.
Meanwhile the U.S. Federal Reserve began its latest policy meeting, and market expectation is that the central bank will leave interest rates alone despite steady gains in the U.S. economy.
With files from The Associated Press