North American stock markets fall from Friday records in broad-based decrease

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TORONTO — North American stock markets fell from Friday's record highs in a broad-based decrease amid virus and political uncertainties.

With a lack of news to drive activity, movement was mainly due to elevated political anxiety after last week's riots in Washington, D.C., said Craig Fehr, investment strategist at Edward Jones, with additional concerns about COVID-19 vaccine distribution and expectations of additional fiscal stimulus.

"You're just seeing markets react a little bit more to the fact that equities are coming off record highs last week and even strong markets with an optimistic outlook are going to take breathers periodically," he said in an interview.

"I would look at today as just a day where markets are taking a pause."

The S&P/TSX composite index closed down 107.62 points to 17,934.45 after Friday's record close.

In New York, the Dow Jones industrial average was down 89.28 points at 31,008.69. The S&P 500 index was down 25.07 points at 3,799.61, while the Nasdaq composite was down 165.55 points at 13,036.43.

Health care was the lone TSX sector to climb, gaining 3.4 per cent led by CRONOS Group Inc., which rose nine per cent.

Ten of the 11 major sectors fell, led by materials, industrials, and technology.

The sector which includes miners, forestry and fertilizer companies, lost 1.7 per cent on mixed movement of metals. Shares of First Quantum Minerals Ltd. decreased six per cent.

The February gold contract was up US$15.40 at US$1,850.80 an ounce and the March copper contract was down 10.90 cents at US$3.56 a pound.

Industrials lost 1.1 per cent with Canadian Pacific Railway down 2.8 per cent and Air Canada off two per cent.

The U.S. technology sector faced some weakness as large tech names including social media firms suffered backlashes after President Donald Trump's accounts were shut down by Twitter and Facebook.

In Canada, technology was down one per cent with Docebo Inc. dropping 8.4 per cent.

Energy was also lower despite a slight increase in crude oil prices amid ongoing worries about global demand because of the coronavirus pandemic. Whitecap Resources Inc. dropped 2.4 per cent, followed by MEG Energy Corp at 1.8 per cent.

"There is an expectation for a pretty robust and sustained global rebound but as we advance the demand story is still going to remain a key driver of crude oil prices," said Fehr.

The February crude oil contract was up one cent US at US$52.25 per barrel and the February natural gas contract was up 4.7 cents at US$2.75 per mmBTU.

The Canadian dollar traded for 78.20 cents US compared with 78.71 cents US on Friday.

Fehr believes the pace of vaccinations and prospects of more severe lockdowns will influence market movements this week ahead of U.S. banks reporting fourth-quarter earnings beginning on Friday.

Fehr expects the fourth quarter of 2020 and first quarter of 2021 will bear the brunt of lockdowns.

"Today notwithstanding, the market has been willing to look past some of the rough patches in the economic that have been driven by these lockdowns to the expectation that a post-vaccine [recovery] will be rather robust."

This report by The Canadian Press was first published Jan. 11, 2021.

Companies in this story: (TSX:FM, TSX:AC, TSX:CP, TSX:CRON, TSX:WCP, TSX:MEG, TSX:DCBO, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press