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Canada’s main stock index fell on Thursday, weighed by energy stocks, after the U.S. Federal Reserve disappointed expectations for further stimulus to spur inflation and support the world’s largest economy.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 174.41 points, or 1.07%, at 16,121.25.
Wall Street’s main indexes opened lower on Thursday after data showed high levels of weekly jobless claims, while technology-related stocks resumed their slide with Apple Inc and Amazon.com Inc among the biggest drags on the Nasdaq.
The Dow Jones Industrial Average fell 198.20 points, or 0.71%, at the open to 27,834.18.
The S&P 500 opened lower by 38.63 points, or 1.14%, at 3,346.86. The Nasdaq Composite dropped 254.42 points, or 2.30%, to 10,796.05 at the opening bell.
The Labor Department’s report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained perched at extremely high levels as the labor market recovery shifts into low gear and consumer spending cools.
In a news conference on Wednesday, Fed Chair Jerome Powell also indicated a long road to “maximum employment” and said the central bank was limited in its capacity to address some of the gaps around wage growth and workforce participation.
“The bulls basically wanted more long term bond buying (and) the fact that the Fed failed to provide that additional upside, investors are a bit more bearish today,” said Mike Bailey, director of research at FBB Capital Partners in Bethesda, Maryland.
The S&P 500 sold off after Powell’s remarks, with the technology sector, which had been recovering from a rout earlier in September, tumbling 1.6%.
A broader slump in tech-related stocks halted a five-month rally in the benchmark index this month and pushed the Nasdaq into correction.
Oil prices fell on Thursday as U.S. producers in the Gulf of Mexico prepared to resume output following Hurricane Sally, and on concerns about the slow recovery from the economic impact of the coronavirus pandemic.
Brent crude was down 22 cents, or 0.5%, to $42.00 a barrel at 1219 GMT, and U.S. West Texas Intermediate (WTI) crude fell 28 cents, or 0.7%, to $39.88 a barrel.
Both contracts rose more than 4% on Wednesday.
U.S. energy companies were starting to return crews to offshore oil platforms in the Gulf of Mexico after Hurricane Sally halted operations for five days, shutting down output of nearly 500,000 barrels per day (bpd).
“As producers prepare to resume production, oil prices are retreating from yesterday’s price spike,” said oil broker PVM’s Tamas Varga.
An OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a decline in oil stocks, according to an internal document seen by Reuters.
Reuters
