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North American markets mixed, Nasdaq on track for new record – BNN

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4:15 p.m. ET: North American markets fall, close near session lows

North American equity markets closed lower in Tuesday’s trade, erasing much of the gains from Monday’s rally. The S&P/TSX Composite Index fell 0.47 per cent, the S&P 500 dropped 1.08 per cent, the Dow Jones Industrial Average declined 1.51 per cent and the Nasdaq Composite Index shed 0.86 per cent of its value.

The selloff accelerated into the closing hour of trading, after the major North American markets were largely mixed through midday. The declines marked the first negative showing for the S&P 500 in six trading sessions, with the broad-market benchmark snapping its longest winning streak of the year.

U.S. markets were led lower by stocks seen as sensitive to the prospects for a global economic reopening, with airlines, hotel operators and cruise line stocks posting losses. Boeing Co. on its own erased 62 points from the Dow with its 4.77 per cent drop.

In Toronto, nine of the 11 TSX subgroups finished in negative territory, with consumer discretionary, financials and health care posting the largest declines. Only materials and information technology closed the day higher.

160 of the composite’s 221 individual constituents closed out the session lower, with Enerplus Corp. and Seven Generations Energy Ltd. notching the largest percentage declines.

Oil prices retreated modestly, with U.S. benchmark West Texas Intermediate falling 0.74 per cent to US$40.33 per barrel and Alberta’s Western Canadian Select down 0.39 per cent to US$33.08 per barrel.

The Canadian dollar slipped against its American counterpart, falling four-tenths of a cent to 73.48 cents U.S.

12:00 p.m. ET: North American markets mixed, Nasdaq on track for new record

North American equity markets were mixed entering the Tuesday afternoon session, with the S&P/TSX Composite up about 0.2 per cent, the S&P 500 trading essentially flat, the Dow Jones Industrial Average down 0.7 per cent and the tech-heavy Nasdaq Composite Index up half a per cent.

Gains made in technology stocks had the Nasdaq on track to post a new record closing high, as heavyweights including Apple Inc., Facebook Inc. and Microsoft Corp. pushed the index higher.

The underperformance of the Dow was in no small part due to a 3.6 per cent decline in shares of Boeing, which took 46 points off the average on its own. Shares in the U.S. planemaker fell amid broad-based weakness in airline and hotel stocks amid concerns the surging U.S. COVID-19 case count could lead to another clampdown on gradual economic reopenings.

In Toronto, six of the 11 TSX subgroups were in negative territory, led lower by financials, health care and consumer discretionary stocks. Information technology, materials and industrials were the top performers.

Just over half of the composite’s 221 individual constituents were lower, with Enerplus Corp and Air Canada posting the largest percentage declines.

Oil prices pushed modestly higher, with U.S. benchmark West Texas Intermediate rising half a per cent to US$40.83 per barrel. Alberta’s Western Canadian Select gained 0.63 per cent to US$33.42 per barrel.

The Canadian dollar continued to lose ground against its American counterpart, shedding a quarter of a cent to trade at 73.61 cents U.S.

9:40 a.m. ET: North American markets slip, give back some of Monday’s rally

North American equity markets slid in early trading Tuesday, paring some of the gains made in Monday’s rally.

The S&P/TSX Composite Index fell about half a per cent, the S&P 500 declined 0.6 per cent, the Dow Jones Industrial Average dropped 0.75 per cent and the Nasdaq Composite Index slipped a modest 0.3 per cent.

The S&P 500 is on track to snap its five-day string of gains, the longest winning streak for the index since December as investors weigh the impact of global economic reopenings against a surge of new COVID-19 cases in the United States.

Traditional safe-haven assets rose following Monday’s declines, with a measure of the U.S. dollar and U.S. Treasuries both posting modest gains.

In Toronto, all eleven TSX subgroups opened the day in negative territory, led lower by energy, financials and healthcare stocks.

Crude oil gave up ground, with U.S. benchmark West Texas Intermediate down 0.7 per cent to US$40.36 per barrel. Alberta’s Western Canadian Select posted a similar decline, falling 0.66 per cent to US$32.99 per barrel.

The Canadian dollar fell two-tenths of a cent against its American counterpart to 73.64 cents U.S.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

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Dollarama keeping an eye on competitors as Loblaw launches new ultra-discount chain

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Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.

“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.

“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”

Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.

However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.

The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.

Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.

“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.

Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.

“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.

The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.

The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.

The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”

“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.

Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.

Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.

She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”

Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.

To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.

“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”

The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.

“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.

“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”

This report by The Canadian Press was first published Sept. 11, 2024.

Companies in this story: (TSX:DOL)

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U.S. regulator fines TD Bank US$28M for faulty consumer reports

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TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.

The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.

It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.

CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.

TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.

The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.

This report by The Canadian Press was first published Sept. 11, 2024.

Companies in this story: (TSX:TD)

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