TORONTO — Canada's main stock indexed ended a seven-month winning streak and scored its largest monthly decline since last October despite hefty gains in the energy sector.
The S&P/TSX composite index closed down 87.89 points to end the month of September at 20,070.25 points after almost moving into the green in afternoon trading.
The market ended down 1.6 per cent for the week and 2.5 per cent for month. It was the first monthly decline since January and the largest since falling 3.4 per cent in October 2020. The quarter was relatively flat as strong gains from earlier in 2021 have moderated somewhat, but the Toronto index is still up 15.1 per cent year-to-date.
In New York, the Dow Jones industrial average was down 546.80 points at 33,843.92. The S&P 500 index was down 51.92 points at 4,307.54, while the Nasdaq composite was down 63.86 points at 14,448.58.
"It's been a bit of a sloppy day for markets," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
"I think we've got some people adjusting positions for quarter-end and things like that. I didn't really feel there is a big driver out there per se."
The historically volatile month of September stayed true to form with the prospect that choppiness will remain in the coming weeks.
"I think what we've been seeing this month is investors getting their heads around the idea that the liquidity party is going to end soon," he said in an interview, pointing to U.S. Federal Reserve signals that the central bank will soon begin winding down its bond purchases. Higher interest rates are likely to follow.
"This free easy money that had flooded the system is likely going to dry up and I think people have kind of been repositioning and rethinking a lot of things around that, and that's why we've seen things like technology in particular come under pressure lately."
Technology again lost ground as U.S. 10-year bond yields slipped below 1.5 per cent after peaking at 1.567 per cent earlier in the week.
The sector is typically hurt by higher yields because future profits are less attractive to investors.
"Growth momentum stocks that benefited from easy money then are the ones that are getting hit when capital starts come draining back out," Cieszynski said.
Technology fell 0.44 per cent on Thursday with shares of Lightspeed Commerce Inc. down three per cent after losing 11.7 per cent on Wednesday once American short-seller Spruce Point claimed the Montreal-based company was exaggerating the size of its potential market and hiding the decline in its activities through successive acquisitions.
Consumer discretionary was the big laggard on the day among the eight losing sectors with shares of Sleep Country Canada Holdings Inc. down 7.3 per cent and BRP Inc. off 4.8 per cent.
The heavyweight financials sector also decreased with banks losing as much as 1.7 per cent.
Energy and materials increased as crude oil, natural gas and gold prices all rose.
The November crude contract was up 20 cents at US$75.03 per barrel and the November natural gas contract was up 39 cents at US$5.87 per mmBTU.
The December gold contract was up US$34.10 at US$1,757.00 an ounce and the December copper contract was down 11 cents at US$4.09 a pound.
Energy climbed as Arc Resources Inc. and Tourmaline Oil Corp. both increased 3.2 per cent.
Canadian energy producers have benefited as crude prices have more than doubled and natural gas has increased 175 per cent since last October. There were up 9.5 and 34 per cent, respectively, for September.
Prices could rise further if additional hurricanes disrupt U.S. production at a time when some OPEC countries, particularly in Africa, haven't been able to keep up with authorized production quota increases, Cieszynski said.
The Canadian dollar traded for 78.88 cents US compared with 78.49 cents US on Wednesday.
This report by The Canadian Press was first published Sept. 30, 2021.
Companies in this story: (TSX:ARX, TSX:TOU, TSX:ZZZ, TSX:DOO, TSX:LSPD, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press