Canada’s main stock index fell on Thursday as a drop in commodity prices weighed on resource shares and investors worried that a lengthy period of high interest rates could lead to problems in the global economy. The Dow and the S&P 500 also ended lower, dragged down by Walt Disney Co, which reported weaker subscriber growth, and declines in regional bank and energy stocks.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 81.70 points, or 0.4%, at 20,417.61, adding to its modest decline since the start of the week.
“People are worried about interest rates being higher for longer and everyday there is more and more focus on the problems in commercial real estate which I think are beginning to affect investors,” said Michael Sprung, president at Sprung Investment Management. “It’s almost like everybody is waiting for the next shoe to drop.”
The Toronto market’s energy sector fell 1.1% as oil settled 2.3% lower at $70.87 a barrel.
Gold and copper prices also fell, while the materials group, which includes precious and base metals miners and fertilizer companies, lost 2.9%.
CI Financial Corp was a bright spot. Its shares surged 23.2% after the fund manager sold a minority stake in its U.S. wealth management business and beat quarterly revenue estimates.
“For a long time CI was actually buying up businesses in the U.S. and now they seem to be starting to sell out some of their non-core assets and raising some capital which is what the market likes to see,” said Allan Small, senior investment advisor at Allan Small Financial Group.
Among other stocks, Nutrien Ltd fell 1.6% after the company cut its annual profit forecast.
The Dow Jones Industrial Average fell 221.82 points, or 0.66%, to 33,309.51; the S&P 500 lost 7.02 points, or 0.17%, at 4,130.62; and the Nasdaq Composite added 22.07 points, or 0.18%, at 12,328.51.
Lifting the Nasdaq, shares of Alphabet Inc rose 4.3%, a day after Google rolled out more artificial intelligence products to take on competition from Microsoft Corp. Microsoft shares eased 0.7% and were among the biggest negative influences on the S&P 500 and Nasdaq.
PacWest Bancorp shares dropped 22.7% after it reported its deposits fell 9.5% last week and that it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.
Other regional bank shares fell as well, as the news revived worries about the industry’s health following the recent collapse of three regional lenders. The KBW regional bank index ended down 2.4%.
“I don’t think you can say that it is a widespread issue. It is still very much bank by bank. But there’s very likely to be more consolidation and more headaches for regional bank investors,” said Oliver Pursche, senior vice president and advisor at Wealthspire Advisors in Westport, Connecticut.
Walt Disney shares slid 8.7% after the company reported late Wednesday quarterly earnings in line with analysts’ expectations but said total subscribers to its flagship Disney+ service dropped.
Shares of Tesla Inc jumped in late trading after Elon Musk tweeted that he had found a new chief executive for Twitter. Tesla shares ended up 2.1%.
Also continuing to keep investors on edge was the standoff in Washington over raising the U.S. debt ceiling.
“As we get closer and closer to the debt ceiling deadline, you’re going to have more volatility,” Pursche said.
Volume on U.S. exchanges was 10.05 billion shares, compared with the 10.69 billion full-session average over the last 20 trading days. Declining issues outnumbered advancers on the NYSE by a 2.27-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored decliners. The S&P 500 posted six new 52-week highs and 13 new lows; the Nasdaq Composite recorded 63 new highs and 214 new lows.
Reuters, Globe staff