Financial numbers are seen on the digital ticker tape at the TMX Group in Toronto's financial district on Friday, May 9, 2014. THE CANADIAN PRESS/Darren Calabrese

COVID-19 infection spike pushes S&P/TSX composite to more than three-month low

COVID-19 infection spike pushes S&P/TSX composite to more than three-month low

TORONTO — Canada’s main stock index sank to a more than three-month low midweek as global spike in COVID-19 infections raised fears of new lockdowns.

Lockdown measures in France and Germany hit European equities and the rising infection numbers in North America had people wondering if the same result will take place here in another few weeks, said Greg Taylor, chief investment officer of Purpose Investments.

“I think that just caused more people to say it’s time to take some money off the table and just down risk,” he said in an interview.

Taylor said headlines out of Europe attracted everyone’s attention and caught some people off guard.

North American stock markets saw low trading volumes ahead of next week’s U.S. election, as investors didn’t want to take any bets.

Polls indicating a narrowing of former vice-president Joe Biden’s lead over President Donald Trump also raised concerns about a contested election and supported the emergence of this pre-election correction, he said.

The market had been getting comfortable with the idea of a so-called blue sweep by Democrats that would result in a massive stimulus program, Taylor said. But recent polls suggesting the race may be closer raise doubts about that result.

The S&P/TSX composite index closed down 434.37 points or 2.7 per cent to 15,586.57, the lowest closing since July 9.

The decrease came amid a broad-based decline spurred by a tumble of commodity prices.

All 11 major sectors on the TSX ended down, led by materials, energy technology and financials.

The selloff was led by over-owned areas of the market that enjoyed stronger performances, said Taylor.

“It’s more of a selling winners … more than anything else.”

In New York, the Dow Jones industrial average was down 943.24 points to 26,519.95. The S&P 500 index was down 119.64 points at 3,271.04, while the Nasdaq composite was down 426.48 points or 3.7 per cent at 11,004.87.

Materials lost 4.5 per cent with shares of Silvercorp Metals Inc. and Kinross Gold Corp. down 11.1 and 9.5 per cent respectively on lower gold prices prompted by a strengthened U.S. dollar.

The Canadian dollar traded for 75.18 cents US compared with 75.96 cents US on Tuesday.

The December gold contract was down US$32.70 at US$1,879.20 an ounce and the December copper contract was down nearly three cents at US$3.06 a pound.

Investors seeking to raise cash could sell gold, which has performed very well this year.

Energy dropped 3.9 per cent as crude prices fell to the lowest level in nearly a month. That hurt several oil producers, including Vermilion Energy Inc., Husky Energy Inc. and Whitecap Resources Inc., whose shares fell 8.3, 6.3 and six per cent respectively.

The December crude oil contract was down US$2.18 at US$37.39 per barrel and the December natural gas contract was down two cents at US$3.29 per mmBTU.

The lockdowns in Europe, reminiscent of similar moves in March and April, raised concerns about slowing oil demand.

In addition, U.S. weekly inventory levels showed that crude stockpiles increased more than expected at 4.3 million barrels. Production surged to 11.1 million barrels per day, its highest level since July.

Technology lost 3.4 per cent with Lightspeed POS Inc. off 8.5 per cent and Celestica Inc. down 8.2 per cent. Financials decreased 2.3 per cent.

In a sign of investor nervousness, the Volatility Index (VIX), known as Wall Street’s “fear index,” surged to its highest level since June 15.

Taylor expects markets will remain volatile until the outcome of the election becomes clear.

“I don’t think we’re going to see dramatic drops like this carrying on,” he said.

“We’re in a much better position than we were in February and March but I think the volatility is not going to go away any time soon until we get an outcome of the election, that’s really what we what we need to see.”

This report by The Canadian Press was first published Oct. 28, 2020.


Ross Marowits, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A local photographer captured the contrails of two planes that crossed in the sky over north Red Deer on April 15, 2021. (Photo contributed by Eric Fischer)
Planes criss-cross over Red Deer

A local photographer captured the contrails of two planes that crossed in… Continue reading

Leader of the Opposition Erin O’Toole responds to a question during a news conference on Parliament Hill in Ottawa, Tuesday March 23, 2021. THE CANADIAN PRESS/Adrian Wyld
Canadian Taxpayers Association slams federal conservative carbon tax plan

The Canadian Taxpayers Association doesn’t agree with the Conservative Party of Canada’s… Continue reading

Courtesy photo
Average rent in Red Deer increased in March and over past year

Rent in Red Deer keeps rising. Since 2019, the average monthly rent… Continue reading

oldest and largest youth organization in Canada 
Youth HQ coordinates programming for Big Brothers Big Sisters of Red Deer & District and BGC Red Deer & District Club. (File photo by Advocate staff)
Boys and Girls Clubs have a new name

Oldest and largest youth organization in Canada

Red Deer Public Schools will not pilot the new draft curriculum at its elementary schools. (File photo contributed by Red Deer Public Schools)
UPDATED: Red Deer Public Schools says no to piloting new curriculum

Alberta Teachers’ Association support school boards

In this photo taken Sunday, May 17, 2020, U.S. and Canadian flags fly atop the Peace Arch at Peace Arch Historical State Park on the border with Canada in Blaine, Wash. THE CANADIAN PRESS/AP/Elaine Thompson
A electric car is seen getting charged at parking lot in Tsawwassen, near Vancouver B.C., April, 6, 2018. File photo by THE CANADIAN PRESS/Jonathan Hayward
‘Wrong signal:’ Federal ministers protest Saskatchewan’s electric vehicle tax

Two federal ministers are protesting Saskatchewan’s plan to bring in a tax… Continue reading

Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during Question Period in the House of Commons Tuesday December 8, 2020 in Ottawa. Canada’s charities are looking to next week’s federal budget with hopes the Liberals will extend their sector a helping hand as they face the possibility of a prolonged and protracted road to recovery even after the economy reopens. THE CANADIAN PRESS/Adrian Wyld
Charities hope Liberals’ budget lends helping hand as sector eyes long recovery

OTTAWA — Canada’s charities are hoping the Liberals extend them a helping… Continue reading

Deputy Chief Public Health Officer Howard Njoo responds to a question about vaccines during a weekly news conference, Thursday, Jan. 14, 2021 in Ottawa. Njoo says a faster vaccine ramp-up alone would likely not have thwarted the third wave of COVID-19 in many parts of the country. THE CANADIAN PRESS/Adrian Wyld
Faster vaccines alone could not have stopped third wave: deputy public health officer

A top federal public health official says a faster vaccine ramp-up alone… Continue reading

WestJet president and CEO Ed Sims addresses the airline’s annual meeting in Calgary, Tuesday, May 7, 2019. THE CANADIAN PRESS/Jeff McIntosh
WestJet CEO Ed Sims finds Air Canada aid package ‘bittersweet’ as talks drag on

OTTAWA — WestJet CEO Ed Sims says the federal government’s aid package… Continue reading

British Columbia Premier John Horgan (centre, blue jacket) is drummed into the Lower Post Residential School by Kaska drummers in Lower Post, B.C. on Orange Shirt Day in a 2019 handout photo. A former residential school building known as a place of pain and fear for residents of the remote British Columbia community of Lower Post will be demolished and replaced after decades of lobbying efforts by local Indigenous leaders. The federal and B.C. governments say construction on a new $13.5 building project is set to start in June and expected to be complete next year. THE CANADIAN PRESS/HO-Manu Keggenhoff MANDATORY CREDIT
Residential school building at Lower Post, B.C., to be demolished, replaced

VICTORIA — A former residential school building in the remote British Columbia… Continue reading

A 60-year-old COVID-19 patient fights for his life, desperately gasping for air as head intensivist Dr. Ali Ghafouri, centre, provides life saving medical care in an emergency situation in the intensive care unit at the Humber River Hospital during the COVID-19 pandemic in Toronto on Tuesday, April 13, 2021. The patient was intubated and put on a ventilator successfully. THE CANADIAN PRESS/Nathan Denette
‘Sicker and younger’: Toronto ICU copes with pressure during third wave of pandemic

TORONTO — Intensive care nurse Jane Abas is assessing her patient, checking… Continue reading

FILE - NHL Commissioner Gary Bettman speaks during the “Topping Off” ceremony of the New York Islanders new home, the UBS Arena at Belmont Park in Elmont, N.Y., Friday, Oct. 9, 2020. THE CANADIAN PRESS/AP-Mary Altaffer
Islanders close to selling out inaugural season at UBS Arena

Arena capacity of about 17,000 for hockey

Most Read