TSX closes lower as technology stocks weigh

TORONTO — Canada’s main stock index closed down Monday despite a rise in oil prices as technology stocks continued to weigh on markets in both Toronto and New York.

The technology sell-off started last week when Facebook and Twitter released results that raised growth concerns. On Monday, Twitter dropped 7.6 per cent to add to its 20.5 per cent plunge Friday, while Facebook fell 3.6 per cent to make for a 23 per cent drop in three days.

The S&P/TSX information technology sector was down 3.71 per cent Monday, including a drop of 7.95 per cent for Shopify Inc., as the plunge in U.S. stocks had a knockon effect, said Michael Greenberg, portfolio manager at Franklin Multi-Asset Solutions.

“The big contributor there is Shopify, but they haven’t even had their earnings call, so I think it’s really just a bit of a contagion of what’s happening in the U.S.”

The drop in technology stocks, along with retreats for mining and health-care stocks, left the Toronto Stock Exchange’s S&P/TSX composite index down 48.48 points at 16,345.47.

The index traded as high as 16,442.96 points during the day. The Toronto Stock Exchange as a whole saw 219.1 million shares traded.

The S&P/TSX capped energy index provided the most support for the composite with a 0.62 per cent climb. Energy stocks rose as the September crude contract closed up $1.44 at US$70.13 per barrel and the September natural gas contract ended up two cents at US$2.80 per mmBTU.

Oil prices were climbing as concerns increased on transit problems in the Middle East and other geopolitical issues have heightened supply concerns, said Greenberg.

“You’re just sort of seeing some of the geopolitical risk premium being built back into energy prices at a time when there’s a bit of concern for say, Saudi Arabia to meaningfully increase production.”

In New York, the Nasdaq composite index ended down 107.42 points or 1.39 per cent at 7,630.00 as Netflix, Amazon, and Google also closed lower. The Dow Jones industrial average ended down 144.23 points at 25,306.83 and the S&P 500 index closed down 16.22 points at 2,802.60.

The Canadian dollar averaged 76.80 cents US, up 0.24 of a US cent.

The December gold contract closed down $1.20 at US$1,231.50 an ounce.

CGI Group Inc. closed down 53 cents, or 0.64 per cent, at $82.91 after announcing its U.S. arm had been awarded a six-year cybersecurity contract from the U.S. government, worth a total of US$530 million. The contract builds on work that CGI Federal Inc. has already done to enhance the cybersecurity posture of agencies participating in a multiyear program overseen by the U.S. Department of Homeland Security.