North American stock markets fall on anniversary of pandemic low point

·3 min read
North American stock markets fall on anniversary of pandemic low point

TORONTO — North American stock markets fell as concerns rose about a third wave of COVID-19, a year to the day since hitting a bottom during the early stages of the unprecedented health crisis.

The S&P/TSX composite index closed down 145.33 points at 18,669.80 after hitting an intraday low of 18,642.52.

A year ago, Canada's largest market plunged to a low of 11,172.73 for a 38-per-cent drop in just one month.

The market stormed back, gaining 67 per cent to set record highs.

In New York, the Dow Jones industrial average was down 308.05 points at 32,423.15. The S&P 500 index was down 30.07 points at 3,910.52, while the Nasdaq composite was down 149.84 points at 13,227.70.

Tuesday's market losses were driven by concerns about global demand for commodities as some European countries are back in lockdown amid an acceleration of COVID variants, said Crystal Maloney, head of equity research at CIBC Asset Management.

"Markets are a little bit wobbly today but we're really coming off of the one year from the market lows. It is natural we're going to have some consolidation," she said in an interview.

Energy was the big laggard, losing four per cent on a 6.2 per cent decrease in crude oil prices to the lowest level since Feb. 5.

The May crude oil contract was down US$3.80 at US$57.76 per barrel and the May natural gas contract was down 6.5 cents at US$2.55 per mmBTU.

Shares of MEG Energy Corp. fell 8.2 per cent and Vermilion Energy Inc. was eight per cent lower.

Materials was down 2.6 per cent as gold and copper prices both fell as Hudbay Minerals Inc. shares decreased 8.4 per cent.

The April gold contract was down US$13.00 at US$1,725.10 an ounce and the May copper contract was down six cents at US$4.08 a pound.

Maloney said it's normal for stock markets to have "ebbs and flows" like this.

"When we look at the tremendous run that the markets have had over the past year, I think days like this are not to be unexpected," she said, adding that nothing appears to derail "the likely continued grind higher."

Financials dipped on lower bond yields while industrials slipped as Air Canada shares decreased 3.5 per cent as it joined U.S. firms hit by worries about a potential delayed recovery of the battered travel sector.

Consumer staples led the TSX, gaining more than one per cent on positive investor reaction to George Weston Ltd's decision to sell the Weston Foods bakery business to focus on its investment in Loblaw Companies Ltd. and Choice Properties Real Estate Investment Trust.

"That's a little bit sooner than we had expected with our return-of-capital thesis that we had on Weston," Maloney said.

Weston's shares climbed 5.4 per cent. Loblaw shares rose 3.5 per cent as it unveiled executive changes following the retirement of the grocer's chief executive and its CFO. Galen G. Weston is resuming his duties as CEO while Weston's CFO will also oversee Loblaw's books. The company is also bringing in Robert Sawyer, former chief operating officer for Metro Inc. and a Rona Inc. chief executive.

The Canadian dollar traded for 79.61 cents US compared with 79.92 cents US on Monday.

The loonie responded positively after the Bank of Canada said it would wind down beginning in April some of its pandemic buying and lending programs as market conditions improve.

"I think that that's a good sign in the sense that they view that the markets are open, they're healthy, they're functioning," said Maloney.

This report by The Canadian Press was first published March 23, 2021.


Ross Marowits, The Canadian Press