Crude tumbles $3, stock indexes drop
TORONTO — Major North American stock indexes fell Friday in a low-volume trading day that also saw the price of oil fall by nearly $3 US.
The S&P/TSX composite index fell by 74.32 points to 17,040.20.
In New York, the Dow Jones industrial average lost 112.59 points to 28,051.41, the S&P 500 index fell by 12.65 points to 3,140.98 and the Nasdaq composite shed 39.70 points to 8,665.47 after a half-day of trading following the American Thanksgiving holiday on Thursday.
“The biggest driver for both the TSX and the S&P 500 was the sharp pullback in oil prices,” said Candice Bangsund, vicepresident and portfolio manager of global asset allocation at Fiera Capital Corp.
The shares in the TSX’s energy sector shed 1.68 per cent of their worth, on average, as the January crude contract fell by $2.94 to $55.17 per barrel.
The energy sector was the second worstperforming of the day on the TSX — outdone only by healthcare's 1.85 per cent drop. The drop in oil prices resulted from speculation about the Organization of the Petroleum Exporting Countries’ (OPEC) upcoming meeting, said Bangsund. The group will meet on Dec. 5 and 6 next week. Markets will watch closely to see if a deal will be reached extending OPEC’s pledge to cut oil production.
The impact from the fall in oil prices came as the market’s general tone Friday was one of caution and off-risk sentiment, said Bangsund. “With little in the way of any notable economic data and central bank development, I think investors were just likely taking a breather,” she said, making for a “fairly uninspiring finish” to a shortened holiday week that saw gains throughout the week.
All four major indexes set new records Monday, Tuesday and Wednesday — with the TSX continuing that trend Thursday while U.S. markets were closed.
The thin trading day saw investors focused on developments on the trade front, including a potential trade deal between U.S. and China and building tension in Hong Kong.
In currency markets, the Canadian dollar traded for 75.25 cents US compared with an average of 75.27 cents US on Thursday.
The Canadian currency, which is closely tied to oil prices, opened softly, but rebounded following the release of Canada’s GDP data, said Bangsund.
Statistics Canada said Friday that the pace of economic growth in the country slowed in the third quarter. Real gross domestic product grew at an annualized rate of 1.3 per cent in the three month period compared with a revised reading of 3.5 per cent for the second quarter.
That slightly outperformed economists’ expostulations. Economists had expected annualized growth of 1.2 per cent in the third quarter, according to financial markets data firm Refinitiv.
Elsewhere in commodities, the January natural gas contract retreated by 22 cents to $2.28 per mmBTU. The February gold contract advanced $11.90 to $1,472.70 an ounce and the March copper contract fell about 3.5 cents to $2.66 a pound.
• German automaker Daimler said Friday that it plans to cut at least 10,000 jobs worldwide by the end of 2022. It plans not to fill some vacant posts and to offer severance packages in Germany to reduce administrative jobs.
The company had said Nov. 14 that it plans to slash costs by 1.4 billion euros by cutting every tenth managerial position and through other measures, but didn’t give details. Daimler had agreed with its employee council on principles to slim down the company structure and the two sides will work on implementation details.