Canada’s main stock index ended lower for a fifth straight day on Friday, led by declines for the real estate and consumer discretionary sectors, as investors turned cautious ahead of a potentially volatile period for the market.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 87.88 points, or 0.36%, at 24,463.67, extending its pullback from last Friday’s record high.
For the week, the TSX was down 1.45%. It was the first time since April the index has fallen for five straight days. Still, it was up 1.93% since the beginning of October.
“We had a really good start to the month,” said Greg Taylor, portfolio manager at Purpose Investments. “We pulled forward a lot of good news and now people are bracing for some volatility in the next few weeks.”
Wall Street has been unsettled this week by a rapid rise in U.S. bond yields, while uncertainty around the Nov. 5 U.S. presidential election has also made investors cautious after markets started pricing in a second Donald Trump administration in recent weeks.
Canada’s immigration reduction targets announced this week will likely have an impact on the Bank of Canada’s growth forecast, Governor Tiff Macklem said, but cautioned the bank was yet to analyze the numbers.
On Wednesday, the BoC cut interest rates by an unusually large half a percentage point to support the economy.
The real estate and consumer discretionary sectors both fell 0.9% on Friday, while the materials group, which includes gold mining shares, was down 0.72%.
Mali has accused Barrick Gold Corp of failing to abide by commitments made in a recent agreement, charges the Canadian miner denied after the market’s close on Thursday. Shares of Barrick ended 3.16% lower on Friday.
Energy was a bright spot, rising 1.39%, as oil futures settled 2.27% higher at $71.78 a barrel.
On Wall Street, the Nasdaq ended higher, driven by megacap shares, as investors awaited quarterly results from some of Wall Street’s biggest companies next week.
Tesla shares rose 3.36% a day after surging 22% on the electric vehicle maker’s sales forecast. Amazon, Apple and Microsoft also rose.
“Tesla numbers helped rekindle some optimism of investors that the Magnificent Seven rally is not over,” said Brian Jacobsen, chief economist at Annex Wealth Management.
He was referring to the group of interest rate-sensitive technology stocks which have surged on enthusiasm for artificial intelligence. Chip heavyweight Nvidia gained, briefly overtaking Apple as the world’s most valuable company based on its shares.
The benchmark 10-year Treasury note yield edged higher as investors awaited U.S. employment data next week for clues on the likely path of Federal Reserve interest rate cuts. Earlier this week, the yield reached a three-month high of 4.26%, weighing on the stock market.
The Dow Jones Industrial Average fell 259.96 points, or 0.61%, to 42,114.40, the S&P 500 lost 1.74 points, or 0.03%, to 5,808.12 and the Nasdaq Composite gained 103.12 points, or 0.56%, to 18,518.61.
The Dow slumped as banking shares fell, with Goldman Sachs down 2.27%, and as fast-food chain McDonald’s lost 2.97% while coping with an E. coli outbreak linked to its hamburgers.
“Banks have rallied as (U.S. presidential candidate Donald) Trump’s odds (of winning) increased, so it seems investors are taking some profits,” said Michael Rosen, chief investment officer at Angeles Investments.
Regional lender New York Community Bancorp dropped 8.26% after reporting its fourth straight quarterly loss, primarily due to its commercial real estate loans.
Only the Nasdaq closed the week with gains. The tech-heavy index rose 0.16%, while the S&P fell 0.96% and the Dow sank 2.68%.
Investors are still pricing in another 25-basis-point rate cut at the Fed’s November meeting and about two rate cuts by the end of the year, LSEG data showed.
The week starting Oct. 28, the final stretch before the Nov. 5 U.S. presidential election, is crucial for Wall Street. This is when results from megacap tech firms including Alphabet , Apple and Microsoft are due, along with the October U.S. nonfarm payrolls report.
In U.S. stock moves Friday, Capri Holdings slumped 48.89% after a U.S. judge blocked a pending merger between the fashion holding company and handbag maker Tapestry. Shares of Tapestry rose 13.54%.
Most of the 11 S&P sectors closed down, with utilities leading the pack.
Declining issues outnumbered advancers by a 1.56-to-1 ratio on the NYSE. There were 180 new highs and 43 new lows on the NYSE.
The S&P 500 posted 30 new 52-week highs and two new lows while the Nasdaq Composite recorded 78 new highs and 87 new lows.
Volume on U.S. exchanges was 11.54 billion shares, compared with the 11.28 billion average for the full session over the last 20 trading days.
Reuters, Globe staff