Canada’s main stock index ended lower for a second straight day on Thursday as investors grew cautious ahead of a key U.S. employment report, but gains for energy shares on soaring oil prices helped contain the market’s decline. U.S. indexes were also modestly lower.
U.S. nonfarm payrolls data, due on Friday, is expected to show the American economy added 140,000 jobs in September. Investors are anxious for more data on the labour market after the Federal Reserve last month cut its benchmark interest rate by an unusually large 50 basis points.
Data on Thursday showed that the number of Americans filing new applications for unemployment benefits rose marginally last week. Still, Hurricane Helene and strikes at ports could distort the labour market picture in the near term.
The S&P/TSX composite index ended down 33.05 points, or 0.1%, at 23,968.50, adding to a modest pullback since notching a record closing high on Tuesday.
The materials sector, which includes mining companies, ended 1.2% lower as copper prices declined. Shares of NovaGold Resources were particularly hard hit, ending down 12.7%, after the company reported quarterly results.
The utilities and real estate sectors fell 1.3% and 1.7% respectively as bond yields climbed after the release of strong U.S. services sector data. The Canadian 10-year bond yield was up 7.3 basis points at 3.100%. The Institute for Supply Management survey showed U.S. service sector activity jumped to a one-and-a-half-year high in September, further evidence that the economy stayed robust in the third quarter.
The TSX energy sector was one of just three sectors to notch gains. It advanced 2.8% as the price of oil settled 5.2% higher at $73.71 a barrel over concerns that the escalating Middle East conflict could hit crude supply.
Israel’s military told residents of more than 20 towns in south Lebanon to evacuate their homes immediately. Asked on Thursday if he would support Israel striking Iran’s oil facilities, U.S. President Joe Biden told reporters: “We’re discussing that.”
The Cboe Volatility index, Wall Street’s fear gauge, rose to 20.49, its highest closing level since Sept. 6.
The Dow Jones Industrial Average fell 184.93 points, or 0.44%, to 42,011.59, the S&P 500 lost 9.58 points, or 0.17%, to 5,699.96 and the Nasdaq Composite eased 6.65 points, or 0.04%, to 17,918.48.
The S&P 500 remains up 19.5% for the year so far.
Traders are now pricing in a 35% probability of a 50 basis point cut next month, down from 49% a week ago, the CME Group’s FedWatch Tool shows..
A workers’ strike on the East and Gulf coasts entered its third day. Morgan Stanley economists said a prolonged stoppage could raise consumer prices, with food prices likely to react first.
Constellation Brands shares fell 4.7% after the beer maker maintained its sales and profit forecast for fiscal year 2025.
Results from some of the big U.S. banks are expected to unofficially kick off third-quarter S&P 500 earnings at the end of next week.
Declining issues outnumbered advancing ones on the NYSE by a 2.13-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favored decliners. The S&P 500 posted 25 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 63 new highs and 114 new lows. Volume on U.S. exchanges was 11.01 billion shares, compared with the 12.08 billion average for the full session over the last 20 trading days.
Reuters, Globe Investor