TSX falls on lower crude prices amid concerns about reduction in vaccine shipments

TORONTO — Canada's main stock market fell Friday to end the week lower on a drop in oil prices and concerns about a temporary reduction in vaccine shipments from Pfizer.

The S&P/TSX composite index closed down 49.06 points to 17,909.03, a slight decrease from the prior Friday but up 2.7 per cent so far in January.

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U.S. stock markets continued the slow decline started Thursday afternoon, ahead of president-elect Joe Biden's speech unveiling his US$1.9-trillion stimulus package.

"You would think that it would stimulate the market but it had the opposite impact," said Pierre Cleroux, chief economist for the Business Development Bank of Canada.

"The market I guess thought that the amount is too large … and I guess investors are worried that we're going to see tax increases in the future."

In New York, the Dow Jones industrial average was down 177.26 points at 30,814.26. The S&P 500 index was down 27.29 points at 3,768.25, while the Nasdaq composite was down 114.14 points at 12,998.50.

Cleroux said he's surprised by the market reaction because he believes it's a good package. Even though US$1,400 in additional direct payments to Americans is a lot of money, it will help to stimulate the economy and retail sales that again faltered in December for a third-straight monthly decline.

U.S. retail sales fell by a seasonally adjusted 0.7 per cent. The results don't include services such as haircuts and hotel stay, which have been badly hurt by the pandemic.

The unexpected decline underscores the economy's troubles as the pandemic has worsened this winter. Employers shed jobs last month for the first time since April. And layoffs appear to be continuing, as the number of people seeking jobless benefits jumped last week to the highest level since August.

U.S. earnings season kicked off with results from three big banks. Citigroup, JPMorgan and Wells Fargo beat expectations but some posted weaker revenues or increased credit loss provisions.

Energy was the weakest sector on the TSX, losing 3.9 per cent as shares of several Canadian producers fell. MEG Energy Corp. was down 5.3 per cent, Cenovus Energy Inc. five per cent, Crescent Point Energy Corp. 4.9 per cent and Suncor Energy Inc. 4.8 per cent.

Crude oil prices dropped on concerns that growing lockdowns will hurt energy demand.

The March crude oil contract was down US$1.20 at US$52.42 per barrel and the February natural gas contract was up 7.1 cents at nearly US$2.74 per mmBTU.

The materials sector was also lower, losing 2.1 per cent, as metals prices decreased, with First Quantum Minerals Ltd. down 6.9 per cent.

The February gold contract was down US$21.50 at US$1,829.90 an ounce and the March copper contract was down 6.25 cents at US$3.60 a pound.

Consumer staples were strongest on the day, gaining 2.1 per cent, as shares of Alimentation Couche-Tard Inc. climbed 4.7 per cent after France's finance minister objected to the company's bid for Carrefour, the country's largest private sector employer, over food security concerns.

"It's not over yet this story but with the announcement of the French government it's not going very well," said Cleroux.

Technology rose slightly as BlackBerry shares gained 8.9 per cent after it resolves patent disputes with Facebook..

Telecommunications were helped by a six per cent gain in shares of Cogeco Communications Inc. after its quarterly report, while Air Canada's 4.1 per cent drop pushed industrials lower.

— With files from The Associated Press.

This report by The Canadian Press was first published Jan. 15, 2021.

Companies in this story: (TSX:BB, TSX:ATD.B, TSX:SU, TSX:MEG, TSX:CVE, TSX:CPG, TSX:FM, TSX:AC, TSX:BB, TSX:CCA, TSX:GSPTSE, TSX:CADUSD=X)

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