Toronto stocks fell to an over two-week low on Wednesday led by losses in technology stocks, as investors were spooked after rating agency Fitch downgraded United States' top credit rating, prompting them to park their money in safe-haven assets.
The TSX cratered 334.87 points, or 1.6%, to stop for lunch Wednesday at 20,198.06
The Canadian dollar dropped 0.34 cents to 75.01 cents U.S.
Britain's competition regulator said on Wednesday it was investigating Cameco Corp and Brookfield Renewable Partners' $7.9-billion deal to acquire nuclear power plant equipment maker Westinghouse Electric. The stock fell $3.21, or 7%, to $42.67, and was among the worst performers on the benchmark index.
Canadian-listed shares of Thomson Reuters rose $5.05, or 2.8%, to $184.48 after it reported higher sales and operating profit in the second quarter.
ON BAYSTREET
The TSX Venture Exchange slid 9.91 points, or 1.6%, to 612.77.
All but one of the 12 TSX subgroups declined, as information technology withered 3.8%, while gold swooned 2.6%, and materials faltered 2.5%,
Only health-care stood up against the negative tide, picking up 0.8%.
ON WALLSTREET
Stocks dove Wednesday after Fitch downgraded the long-term rating for the U.S. and Wall Street assessed the fallout.
The Dow Jones Industrials backtracked 264.45 points to reach noon EDT Wednesday at 35,366.23.
The S&P 500 Index let go of 62.76 points, or 1.4%, to 4,513.97.
The NASDAQ index staggered 336.68 points, or 2.4%, to 13,94 7.97.
Fitch Ratings cut the long-term foreign currency issuer default rating for the U.S. to AA+ from AAA Tuesday night, citing “expected fiscal deterioration over the next three years.”
Chinese tech names JD.com, Alibaba and Baidu fell more than 4% as China proposed limits smartphone use for minors. Mega caps Amazon, Alphabet, Microsoft and Nvidia slumped more than 2%.
On top of that, a busy earnings week carried on. CVS Health rose about 4% after posting strong earnings as it trims costs, while Humana gained after posting lower-than-expected medical costs. Elsewhere, Advanced Micro Devices fell 6.6% despite better-than-expected results.
SolarEdge Technologies tumbled 19% after missing second-quarter revenue expectations.
Earnings season is more than halfway through with results coming in stronger than expected. Of the S&P 500 companies that have reported, about 82% have posted positive surprises. The earnings beats have added to bullish investor sentiment, continuing this year’s recovery.
Elsewhere, the latest ADP jobs report showed 324,000 private payrolls added in July. That far exceeded the jobs gains expected by economists polled by Dow Jones, but marked a decrease from June’s downwardly revised 455,000.
Prices for the 10-year Treasury tumbled, raising yields to 4.09% from Tuesday’s 4.03%. Treasury prices and yields move in opposite directions.
Oil prices dipped $2.11 to $79.26 U.S. a barrel.
Gold prices subtracted $6.60 to $1,972.20 U.S. an ounce.
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