TORONTO – Stock markets in New York finished solidly in the red Thursday amid the latest round of disappointing data that showed U.S. economic growth retreating to levels not seen in two years.
The Dow Jones industrials plunged 210.79 points to 17,830.76, while the broader S&P 500 fell 19.34 points to 2,075.81 and the tech-heavy Nasdaq plunged 57.85 points to 4,805.29.
Shares in Apple (Nasdaq:AAPL) were a major weight, sinking three per cent to US$94.81 after billionaire investor Carl Icahn told CNBC he had sold his stake in the company. A day earlier Apple reported its first revenue decline in over a decade as iPhone sales fell.
In economic news, the U.S. Commerce Department reported that gross domestic product, the broadest measure of economic health, grew just 0.5 per cent in the first quarter, down from 1.4 per cent growth in the fourth quarter.
The January-March performance was the poorest showing since U.S. GDP contracted by 0.9 per cent in the first three months of 2014.
“This has been a very busy week for economic results,” said Colum McKinley, vice-president of Canadian equities at CIBC Asset Management.
“Investors are digesting a large number of corporate results being reported in the U.S. and part of the reaction today is just digesting and reacting to some of the that news.”
Meanwhile, the S&P/TSX composite index in Toronto was flat, down 1.23 points to 13,886.43 after being propped up early by energy, gold and material stocks.
The loonie continued its recent rise, adding 0.44 of a U.S. cent to 79.69 cents US after hitting an intraday high of 79.90 cents US. The last time the Canadian dollar closed above 80 cents was on June 30, when it finished at 80.06 cents US.
The Canadian currency has gained new life from recent strength in oil prices as well as general U.S. dollar weakness that has followed Wednesday’s statement from the U.S. Federal Reserve indicating it is in no hurry to raise interest rates.
Although some may consider the loonie surpassing 80 cents US a psychological threshold for more gains, McKinley said the currency will remain volatile because it is driven so heavily by crude prices.
However, McKinley noted that oil producers have been aggressively cutting capital expenditures and cutting back on production, which should have a positive effect on prices in the coming months.
On Thursday, the June contract for benchmark North American crude rose 70 cents to US$46.03 a barrel, while June natural gas faded eight cents to US$2.08 per mmBtu. July copper added a penny to US$2.23 a pound, while June gold rose $16 to US$1,266.450 a troy ounce.
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