TORONTO – The Toronto stock market closed sharply lower Monday, with energy stocks leading the decline as the price of oil slipped lower.
The S&P/TSX composite index was down 213.83 points at 14,743.33, its lowest close in two months. That brought its losses since Thursday to well over 400 points.
Meanwhile, the loonie rose 0.27 of a U.S. cent to 80.66 cents.
“All major sectors are down today, so it’s a pretty broad-based sell-off,” said Colin Cieszynski, chief market strategist at CMC Markets Canada.
The TSX’s energy sector was the biggest decliner, slipping 2.4 per cent, while the industrials sector was off 1.7 per cent and metals and mining slipped 1.6 per cent. The only sector of the TSX that didn’t register a decline was global gold, which inched up less than one per cent.
In economic news, Canada Mortgage and Housing Corp. reported that housing starts hit a seasonally adjusted rate of 201,705 units in May, up from 183,329 in April, with the increase driven by multiple-unit projects in Ontario, the Atlantic region and Quebec.
“You would have thought that the market would be doing a little better than it is,” Cieszynski said, noting that Monday’s housing starts data and Friday’s jobs report were both strong.
“Canada is definitely outpacing the U.S. on the downside,” Cieszynski said. “It’s tough trying to figure out why. Energy is a big one; but otherwise the economy is doing well.”
In New York, markets were also down, but the declines were less dramatic.
The Dow Jones industrial average gave back 82.91 points to 17,766.55, while the Nasdaq plunged 46.83 points to 5,021.63 and the S&P 500 lost 13.55 points to 2,079.28.
“U.S. markets are just generally drifting lower,” Cieszynski said, nothing that traders are still digesting the “very strong” employment figures that came out of the U.S. on Friday.
“That moved up the potential timetable for the Fed to raise interest rates, so that’s been weighing on the markets there.”
Positive economic news in the U.S. has been hurting the country’s stock markets lately, as investors anticipate that a rate hike from the U.S. Federal Reserve is imminent.
Cieszynski said June is typically a bad month for North American markets.
“Earnings season is over and there’s not a lot of corporate news out there to drive markets higher,” Cieszynski said.
Traders are looking forward to U.S. retail sales on Thursday.
“That could get U.S. markets going again,” Cieszynski said.
On the commodity markets, the July crude contract was down 99 cents at US$58.14 a barrel while August gold rose $5.50 to US$1,173.60 an ounce.
“This rally we’ve had in crude oil is kind of running out of gas,” Cieszynski said, noting that the commodity climbed from around $40 a barrel to around $60, where it’s now hovering.
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