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Toronto stock market dips on weakness in the energy and financials sectors


TORONTO — Canada's main stock index slipped lower at the end of Thursday trading as a two-day rally by the heavyweight financials sector concluded with banks being among the biggest decliners on the day.

The S&P/TSX composite index closed down for the first time in five days, losing 9.30 points at 15,262.73.

"Kind of a boring day as compared to the great run we've seen the last couple of days," said Allan Small, senior investment adviser at HollisWealth.

There weren't any surprises amid a rotation over the past couple of days out of technology to value sectors like financials that was partly reversed Thursday, he said in an interview.

Financials was the second-worst performer on the day, falling 1.4 per cent as Toronto-Dominion Bank and Laurentian Bank lost 3.8 and 3.7 per cent respectively.

Canadian banks reported this week big decreases in quarterly profits due to large provisions for loan losses. However, some beat expectations.

Energy dropped 1.5 per cent with Whitecap Resources Inc. down 5.5 per cent despite higher crude oil prices.

The July crude contract was up 90 cents at US$33.71 per barrel and the July natural gas contract was down 5.9 cents at nearly US$1.83 per mmBTU.

Crude has been on an upward trajectory as demand is slowly returning after weeks of economic lockdowns because of COVID-19. In addition, Saudi Arabia has talked about cutting more production that gave a boost to the commodity.

The Canadian dollar traded for 72.65 cents US compared with 72.57 cents US on Wednesday.

Health care led the TSX as shares of Canopy Growth Corp. surged 12 per cent, while grocers led the consumer staples sector higher.

Materials was a little higher with Centerra Gold Inc. up 2.9 per cent and B2Gold Corp. rising 2.6 per cent on higher gold prices. 

The August gold contract was up US$1.50 at US$1,728.30 an ounce and the July copper contract was up 3.15 cents at US$2.41 a pound.

In New York, the Dow Jones industrial average was down 147.63 points at 25,400.64. The S&P 500 index was down 6.40 points at 3,029.73, while the Nasdaq composite was down 43.37 points at 9,368.99.

U.S. markets remained above key thresholds but lost some ground late in the day after U.S. President Donald Trump said he would hold a news conference on China Friday. China's legislature endorsed a national security law for Hong Kong that has strained relations with the U.S. 

Earlier, investors seemed to look past weak economic data including a larger decrease in the first-quarter American GDP numbers and more than two million Americans claiming unemployment benefits for the first time last week. Still, the number of continuing claims decreased to 21 million.

Small said the markets have signalled that they're generally willing to look past the negativity on signs that economic reopenings will generate positive returns later in the year. He said fiscal and monetary stimulus will be kerosene on a heating economy.

"Looking out as we move into the summer and into the fall, barring any unforeseen big issue with respect to the virus, I think this market is anticipating things going back online and that with stimulus is pointing to a higher market."

This report by The Canadian Press was first published May 28, 2020.


Ross Marowits, The Canadian Press

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