A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City, on Aug. 7.TIMOTHY A. CLARY/AFP/Getty Images
Canada’s main stock index pulled back on Thursday from a record high as investors assessed a mixed picture for corporate earnings and ahead of domestic jobs that could offer clues on how well the domestic economy is coping with U.S. tariffs. On Wall Street, stocks drifted to a mixed finish, as President Donald Trump’s tariffs taking effect on dozens of countries had only a muted effect on markets worldwide.
Toronto’s S&P/TSX composite index ended down 159.60 points, or 0.6%, at 27,761.27, after earlier touching an intraday record high at 27,977.80.
“The earnings picture has been mixed,” said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James, pointing to misses for some financial and consumer discretionary shares.
“There is a lot of caution due to uncertainty with the macro (outlook) and the tariffs ... We need to have sentiment improve both with the consumer and businesses to really fuel a better economic picture.”
Canada’s employment report for July, due on Friday, is expected to show a more moderate jobs gain of 13,500 after the economy added 83,100 jobs in June.
The consumer discretionary sector fell 2.3%, with the shares of Canadian Tire Corporation Ltd and Restaurant Brands International Inc down 10.6% and 5.2% respectively after the companies missed quarterly profit estimates.
Manulife Financial shares lost 3.9%. The insurer also reported quarterly earnings below analysts’ estimates, largely due to elevated credit and mortality losses in the United States.
The heavily weighted financials sector was down 0.7%, while technology ended 1.4% lower as Shopify Inc gave back some of the previous day’s blockbuster gains.
Canadian Natural Resources Ltd surpassed expectations for second-quarter profit. Still, its shares declined 3%, weighing on the energy group, which ended 0.9% lower.
The price of oil oil settled down 0.7% at $63.88 a barrel as expectations rose for a diplomatic end to the war in Ukraine.
Just two of 10 major sectors ended higher, including materials. Materials, which includes metal mining shares, added 0.7% as the price of gold benefited from speculation that the Federal Reserve will cut interest rates next month.
In the U.S., the S&P 500 slipped 0.1% after briefly climbing to the cusp of its all-time high during the morning. The Dow Jones Industrial Average dropped 224 points, or 0.5%, and the Nasdaq composite rose 0.3% to a record.
Worries are high that Trump’s tariffs are damaging the economy, particularly after last week’s worse-than-expected report on the job market. But hopes for coming cuts to interest rates by the Federal Reserve and a torrent of stronger-than-expected profit reports from big U.S. companies are helping to offset the concerns, at least for now.
The U.S. tariffs that took effect Thursday morning were already well known, as well as lower than what Trump had initially threatened. Some countries are still trying to negotiate down the tax rates on their exports, and continued uncertainty seems to be the only certainty on Wall Street. All the while, the U.S. stock market faces criticism that it’s climbed too far, too fast since hitting a bottom in April, with prices looking too expensive.
In individual stocks, footwear maker Crocs tumbled 29.2% even though it reported a stronger profit for the latest quarter than analysts expected. It said it expects revenue to drop as much as 11% in the current quarter from a year earlier, while tariffs are dragging on its profitability. The company cited “continued uncertainty from evolving global trade policy and related pressures around the consumer.”
Eli Lilly dropped 14.1% even though the drugmaker likewise reported a stronger profit for the latest quarter than analysts expected. Analysts said some investors were disappointed with results that Lilly provided for a late-stage study of its potential pill version of the popular weight-loss drug Zepbound.
Intel sank 3.1% after Trump called for its CEO to resign, while accusing him of being “highly CONFLICTED,” though he gave no evidence.
Apple helped keep the market’s losses in check, as it rose on hopes that its massive size can help it navigate Trump’s economy. Its stock climbed 3.2% after CEO Tim Cook joined Trump at the White House on Wednesday to say it’s increasing its investment in U.S. manufacturing by an additional $100 billion over the next four years.
Trump also announced a 100% tariff on imported computer chips, but he added “if you’re building in the United States of America, there’s no charge.”
“Large, cash-rich companies that can afford to build in America will be the ones to benefit the most,” said Brian Jacobsen, chief economist at Annex Wealth Management. “It’s survival of the biggest.”
DoorDash added 5% after the delivery app topped Wall Street’s profit expectations for the latest quarter. It attracted new customers and saw the total number of orders increase.
Duolingo, the language-learning app, jumped 13.7% after it crushed Wall Street’s expectations. The company said its subscription revenue grew 46% over the same period last year.
All told the S&P 500 edged down by 5.06 points to 6,340.00. The Dow Jones Industrial Average dipped 224.48 to 43,968.64, and the Nasdaq composite rose 73.27 to 21,242.70.
In stock markets abroad, indexes rose across much of Europe and Asia.
Stocks climbed 0.2% in Shanghai and 0.7% in Hong Kong after China reported that its exports picked up in July, helped by a flurry of shipments as businesses took advantage of a pause in Trump’s tariff war with Beijing.
Japan’s Nikkei 225 rose 0.6%. Toyota Motor’s stock fell after it cut its full-year earnings forecasts largely because of Trump’s tariffs, but Sony rose after the entertainment and electronics company indicated it’s taking less damage from the tariffs than it had expected.
In the bond market, the yield on the 10-year Treasury rose to 4.23% from 4.22% late Wednesday after the latest reports on the U.S. economy came in mixed.
One said that slightly more U.S. workers applied for unemployment benefits last week. That could be an indication of rising layoffs, but the number remains within its recent range.
“There is nothing to see here!” according to Carl Weinberg, chief economist at High Frequency Economics. “These are not nearly recession readings.”
A separate report said that productivity for U.S. workers improved by more during the spring than economists expected. That could help the U.S. economy grow without adding more pressure on inflation. And that’s particularly important when Trump’s tariffs look set to increase prices for all kinds of things that U.S. households and businesses buy.
Reuters, The Associated Press, Globe staff