TSX, Wall Street pull back as Trump rally begins to run out of steam

TORONTO – Stock markets in North America took a breather Wednesday from a rally that was sparked a week ago by the surprise victory of U.S. president-elect Donald Trump.

The Toronto Stock Exchange’s S&P/TSX composite index fell 22.88 points to 14,733.22, weighed down by metals, energy and gold stocks.

The biggest gainer on the commodity-heavy market was consumer staples, helped by a spike by grocery giants Loblaw Co. (TSX:L) and Metro Inc. (TSX:MRU).

Both supermarket chains reported strong profits in the latest quarter. Loblaw, which saw its profits more than double year-over-year, saw its shares rise $2.11, or 3.26 per cent, to $66.91, while stock in Metro, which reported a 10 per cent increase, gained 96 cents, or 2.36 per cent, to $41.71.

Cynthia Caskey, a portfolio manager and vice president at TD Wealth, says the increases show that investors are still paying attention to fundamentals in the stock market to determine value.

“We’re starting to see a better appreciation when earnings do matter,” she said.

On Wall Street, the Dow Jones industrial average lost 54.92 points to 18,868.14, ending a seven-day winning streak and four record closes.

“There’s been a whole repositioning going on in the market, and that’s kind of played itself out in the last week or so,” Caskey said.

The broader S&P 500 slipped 3.45 points to 2,176.94 and the Nasdaq composite gained 18.96 points at 5,294.58.

Commodity markets were mostly lower as the December crude oil contract lost 24 cents to US$45.57 per barrel, December gold contracts declined 60 cents at US$1,223.90 per ounce, and December copper shed four cents to US$2.47 per pound.

The December contract for natural gas found strength, adding six cents at US$2.76 per mmBtu.

The Canadian dollar was largely flat, advancing 0.03 of a cent at 74.40 cents US.

In economic news, Bank of Canada deputy governor Timothy Lane said Canada is under no pressure to follow suit if the U.S. Federal Reserve decides to raise interest rates at its next meeting in December.

“We are free to adjust our policy interest rate in the context of Canadian economic conditions — and, in particular, do not need to move in step with the Federal Reserve,” Lane said in prepared remarks of a speech delivered Wednesday in Waterloo, Ont.

It’s highly anticipated the Fed will hike its key interest rate, which is in a range of 0.25 per cent to 0.5 per cent, as data continues to support signs of a strengthening U.S. economy.

The Bank of Canada’s key interest rate is 0.5 per cent.

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