North American stock markets plummet on fears that pandemic slump won’t end soon

North American stock markets plummet on fears that pandemic slump won’t end soon

TORONTO — Canada’s main stock index followed other North American markets sharply lower on Thursday, extending its losses amid concerns about how quickly the economy can rebound from the COVID-19 pandemic.

The S&P/TSX composite index closed down 650.41 points — more than four per cent — at 15,050.92 on Thursday after dropping 132.41 points on Wednesday.

American stock exchanges were hit even harder.

In New York, the Dow Jones industrial average was down 6.9 per cent or 1,861.8 at 25,128.17.

The S&P 500 index plunged 5.9 per cent or 188.04 points at 3,002.10 and the Nasdaq composite fell 5.3 per cent or 527.62 points at 9,492.73.

Market observers say a rally in the markets since late March wasn’t justified given the dire state of the economy.

On Wednesday, the U.S. Federal Reserve warned the road to recovery from the worst downturn in decades would be a long one.

“The (Toronto Stock Exchange) market is taking it on the chin today. Yesterday wasn’t a particularly great day either,” said Les Stelmach, portfolio manager at Franklin Templeton Canada.

“I think today it’s really a bit of an unwinding of some of that enthusiasm from (last) Friday and Monday that particularly for some of the energy stocks was off the charts in terms of positive movement in stock prices on really very little news.”

The energy sector led the Toronto market lower with a slide of almost 10 per cent.

The selloff involved some of the country’s biggest oilsands producers, with Canadian Natural Resources Ltd. down 10.7 per cent, Suncor Energy Inc. off by 8.4 per cent and Cenovus Energy Inc. down 10.8 per cent.

The July crude oil contract was down US$3.26 at US$36.34 per barrel, while the July natural gas contract was up 3.3 cents at US$1.81 per mmBTU.

Other sectors also struggled in what turned out to be a widespread selloff. Health care fell by 8.6 per cent and the metals and mining sector was down 8.4 per cent.

“It’s the level of uncertainty out there,” said Stelmach.

“There are so many variables and people just don’t have a really good handle on what these things mean for the economy.”

The selling comes as coronavirus cases rise in the U.S. amid the lifting of stay-at-home and business closure orders. Total U.S. coronavirus cases surpassed two million on Wednesday.

The Canadian dollar traded for 73.78 cents US on Thursday compared with 74.68 cents US on Wednesday.

Stemach pointed out that the materials sector fell despite a strong rise in the price of gold, with the August gold contract up US$19.10 at US$1,739.80 an ounce.

Meanwhile, the July copper contract was down seven cents at US$2.59 a pound.

— By Dan Healing

This report by The Canadian Press was first published June 11, 2020.

Companies in this story: (TSX:CNQ, TSX:SU, TSX:CVE, TSX:GSPTSE, TSX:CADUSD=X)

The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Quebec police continue search for father, one day after missing girls found dead

Bodies were found in a wooded area of Quebec City suburb

Tootoo says Edmonton team name discussion should centre on feelings of Inuk people

Tootoo says Edmonton team name discussion should centre on feelings of Inuk people

Red Deer up to 4 active COVID-19 cases

Province announced 77 new confirmed cases across Alberta Friday

Two young Wetaskiwin men are tackling chores for strangers—for free

“We’ve just been wanting to spread love as much as we can.”

QUIZ: Are you ready for a summer road trip?

How much do you really know about roads, motor vehicles and car culture? Take this quiz to find out.

How Conservative leadership hopefuls would address the WE scandal if they win

The ethics commissioner has been called in to see if Trudeau broke conflict-of-interest law

With debt, deficit numbers out, experts say Liberals need plan for growth

Borrowing will push the federal debt past $1 trillion by the end of the fiscal year

Pedestrian-only downtown a hit with residents as St. John’s adapts to pandemic

‘The city really got this right this time. We’re very happy’

Bosnian-Canadians mark 25th anniversary of Srebrenica massacre

‘It’s sad for a child to think that it’s normal, actually, to … have family members killed’

PODCAST: COVID-19 and the US Election

The Expert welcomes Burman University Political Scientist Marc Froese

Sylvan Lake RCMP continue search for missing man

43-year-old Steven Hull’s last known whereabouts were in the Sylvan Lake area on May 28

Most Read