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Canada’s main stock index opened lower on Thursday, in line with a decline on Wall Street, while data showed Canada’s economic growth stalled in February due to disruptions caused by the novel coronavirus pandemic.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 167.22 points, or 1.1%, at 15,060.89.
The Canadian dollar edged lower against its U.S. counterpart on Thursday, pulling back from an earlier six-week high, as the rally in global shares lost some momentum and domestic data showed no economic growth in February.
The Canadian dollar was trading 0.1% lower at 1.3893 to the greenback, or 71.98 U.S. cents. The currency notched its strongest intraday level since March 16 at 1.3850, while it was on track to rise 1.2% for the month.
Global stocks dipped as the European Central Bank (ECB) kept much of its remaining policy powder dry, preparing for a long fight against the coronavirus pandemic’s fallout. Still, stocks were headed for sharp gains this month, supported by encouraging early results from a COVID-19 treatment trial.
Canada runs a current account deficit and is a major exporter of commodities, including oil, so the domestic economy tends to be dependent on the global flow of trade and capital.
The Canadian economy was flat in February as rotating teacher strikes in Ontario and disruptions in transportation and warehousing stalled the economy, Statistics Canada said. Analysts had forecast a 0.1% increase.
U.S. crude oil futures were up 11.3% at $16.76 a barrel, lifted by signs the U.S. crude glut is not growing as quickly as expected and indications of a rise in fuel demand, which has been crushed by the pandemic.
Canadian hospitals had beds to spare as the country hit 50,373 confirmed coronavirus cases on Wednesday, and several provinces were relaxing public health measures, but health experts were already worrying about a future wave of infections.
Wall Street opened lower on Thursday at the end of a strong month for stock markets globally, as millions more applied for jobless claims in the United States, overshadowing upbeat results from Facebook and Tesla.
The Dow Jones Industrial Average fell 48.29 points, or 0.20%, at the open to 24,585.57. The S&P 500 opened lower by 8.60 points, or 0.29%, at 2,930.91, while the Nasdaq Composite dropped 3.69 points, or 0.04%, to 8,911.02 at the opening bell.
The Labor Department’s report showed initial unemployment claims totaled 3.84 million for the week ended April 25, down from 4.44 million in the previous week and a record 6.87 million in March.
Although the downward trend raised hopes that the coronavirus outbreak’s impact on the labor market had peaked, analysts said investors were still wary of the pace of an economic recovery from a looming recession.
“In large part this data is seen as something we’ve already taken for granted,” said Art Hogan, chief market strategist at National Securities in New York.
“We know that the economic data, especially as it pertains to labor, is bad and is going to get worse.”
Still, the S&P 500 is on course for its best month since 1974, powered by dramatic U.S. monetary and fiscal stimulus and hopes of a revival in business activity as states reopen from lockdowns.
All three U.S. stock indexes ended Wednesday’s session closer to all-time highs reached in February after positive partial data from a trial of Gilead Science Inc’s antiviral remdesivir showed an improved recovery rate in COVID-19 patients.
The Federal Reserve pledged on Wednesday to expand emergency programs to revive growth but dashed hopes for a fast rebound, saying the economy could feel the weight of consumer fear and social distancing for a year.
Analysts forecast a sharper decline in second-quarter corporate earnings, with profits for S&P 500 companies expected to fall 36% following a 15% anticipated drop in the first quarter, according to Refinitiv data.
Reuters
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