Canada’s main stock index opened slightly lower on Wednesday, as losses in shares of auto parts maker Magna International Inc. dragged down the consumer discretionary sector.
The Toronto Stock Exchange’s S&P/TSX Composite index was down 13.13 points, or 0.08 per cent, at 16,273.17 in early trading.
Magna fell 6.2 per cent after lowering its production forecast, while NuVista Energy Ltd. rose 7.1 per cent after reporting a quarterly production increase.
Spin Master Corp. was down just over 5 per cent after announcing a secondary offering.
U.S. stocks opened lower on Wednesday after China retaliated to Washington’s latest tariffs, clouding a strong showing for corporate earnings.
The Dow Jones Industrial Average fell 13.19 points, or 0.05 per cent, at the open to 25,615.72.
The S&P 500 opened lower by 1.66 points, or 0.06 per cent, at 2,856.79. The Nasdaq Composite dropped 3.66 points, or 0.05 per cent, to 7,880.00 at the opening bell.
China responded to an equal degree, after Washington said it would begin collecting 25-per-cent tariffs on another $16-billion in Chinese goods on Aug. 23.
The S&P 500 was just 1 per cent shy of a record it hit on Jan. 26 on Tuesday as an estimated 24-per-cent jump in earnings from S&P companies underscored the strength of the world’s biggest economy and corporate sector.
“We seem to be able to put trade worries on the back burner and focus on second-quarter results, which have been significantly positive,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
“When we see the earnings growth in 2018, the multiples are reasonable at that record level. We’re in a better place in getting to that record high than we were in January.”
A 7-per-cent drop in the shares of Mylan and a 2-per-cent decline in Tesla in early trading also weighed.
Mylan dropped after the drugmaker reported quarterly results and said it was actively evaluating a “wide range of alternatives.”
Tesla had closed up 11 per cent on Tuesday after Chief Executive Elon Musk said he was considering taking the company private.
With the second-quarter earnings season winding down, 79 per cent of S&P 500 companies have topped estimates. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.
Oil prices fell on Wednesday after Chinese import data showed a slowdown in demand and as a trade dispute between Washington and Beijing escalated further.
U.S. crude futures fell more than $1 per barrel to $68.13 after China said it was retaliating against U.S. tariffs by slapping additional import duties of 25 percent on $16 billion worth of U.S. goods, including oil and diesel .
Front-month Brent crude oil futures were down 67 cents at $73.98 a barrel by 1300 GMT.
The trade dispute has rattled global markets on fears it could lead to a slowdown of the world’s largest economies and result in a lower demand for commodities.
China’s crude imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country’s smaller independent, or “teapot,” refineries.
Shipments into the world’s biggest importer of crude came in at 36.02 million tonnes last month, or 8.48 million barrels per day, rising from 8.18 million bpd a year earlier and just up on June’s 8.36 million bpd, customs data showed.
“Even before their implementation, these proposed (Chinese) tariffs are starting to have an impact, with Chinese imports of U.S. crude falling by 70 percent from April to July,” Goldman Sachs said in a note on Wednesday.
The bank said, however, that such tariffs were unlikely to derail the outlook for U.S. energy exports.
Markets remained supported by the introduction on Tuesday of new U.S. sanctions against Iran, which initially target Iran’s purchases of U.S. dollars - in which oil is traded - as well as metals trading, coal, industrial software and its auto sector.
Reuters