Economy & Markets

Wall Street dips into the red

By David Hodges |
Source: The Canadian Press

Weakness in oil and gas shares weighed on Canada's largest stock index Thursday as the loonie made a minor advance on the U.S. dollar.

The Toronto Stock Exchanges's S&P/TSX composite index retreated 58.20 points to 15,742.20, with the energy sector leading decliners with losses of 1.65%.

The November crude contract was down 70¢ to US$50.60 per barrel.

"Any time oil crosses over the US$50 mark, you know that there are producers out there that are hedging," said Jillian Bryan, vice-president at TD Wealth Private Investment Advice. "That has the effect of putting a lid on energy prices so they don't run even further."

"And we've obviously had huge production gains south of the border with their production at all time highs in the U.S." Bryan added. "So the world is awash in energy."

The U.S. Energy Information Administration reported last week that U.S. crude exports jumped to 1.98 million barrels per day, marking the fourth weekly increase.

South of the border, stocks were little changed Thursday as weakening bank shares saw Wall Street slip into negative territory.

The Dow Jones industrial average gave back 31.88 points to 22,841.01. The S&P 500 index inched down 4.31 points to 2,550.93 and the Nasdaq composite index dropped 12.04 points to 6,591.51.

"We had JPMorgan Chase and Citigroup kicking off earning season and basically their performance was somewhat muted so that's the reason U.S. markets are down a little bit today," said Bryan.

While JPMorgan Chase and Citigroup both did better than analysts expected, their stocks lost ground. Citigroup fell US$2.31, or 3.1%, to US$72.63 and JPMorgan Chase gave up 96¢ US, or 1.0%, to US$95.88. Other banks also slipped.

U.S. bank stocks have made big gains over the last month, with companies reporting good results from their consumer banking businesses, but other divisions didn't do as well.

"The bar was set kind of high," said CFRA Research investment strategist Lindsey Bell. "Given the run that these stocks have had into these earnings reports, they're going to need to see these other businesses pick up steam."

In currency markets, the Canadian dollar was trading at an average price of US80.18¢, up 0.17 of a cent.

Elsewhere in commodities, the December gold contract advanced IS$7.60 to US$1,296.50 an ounce.

The November natural gas contract was up US10¢ at US$2.99 per mmBTU, and the December copper contract gained US2¢ at US$3.12 a pound.