TSX barely changed as oil retreats; Wall Street plunges on corporate earnings

TORONTO – The Toronto Stock Exchange fell flat Tuesday, as crude oil retreated from its highest level in more than a year and Wall Street slid on disappointing corporate news that put a damper to the start of earnings season.

The S&P/TSX composite index shed 16.66 points to 14,549.60, after the market was closed on Monday for the Thanksgiving holiday.

In New York, the Dow Jones industrial average lost 200.38 points, or 1.09 per cent, at 18,128.66, while the broader S&P 500 composite index declined 26.93 points, or 1.24 per cent, to 2,136.73. The Nasdaq composite pulled back 81.88 points to 5,246.79.

Health-care companies led the retreat on Wall Street. Shares in genetics research company Illumina tumbled 25 per cent after announcing revenue that fell short of analysts’ forecasts. Stocks ended down US$45.86 to US$138.99.

Metals company Alcoa shed 11 per cent, or US$3.62, to US$27.91 after it reported softer than expected earnings results.

While some companies have lowered investors’ expectations heading into the third-quarter earnings season, Alcoa’s results raise concerns that many other companies might be reporting weaker sales, said JJ Kinahan, chief strategist at TD Ameritrade.

“You hate to see companies missing on sales,” he said. “It’s just a bad tone to get us started.”

The Canadian dollar was up 0.25 of a cent at 75.52 cents US, while the November crude contract fell 56 cents at US$50.79 per barrel.

Oil had closed at US$51.35 a barrel on Monday — its highest level since July 2015 — after Russian President Vladimir Putin said Russia supports OPEC’s efforts to cut oil production.

Russia is not a member of the 14-member Organization of the Petroleum Exporting Countries, which includes Venezuela, Iran and Saudi Arabia.

Last month, the group met informally at an energy conference in Algiers and agreed to a preliminary accord to limit oil production as a way to deal with a global supply glut. No details of the deal will be announced until the next official OPEC meeting in November in Vienna.

The price of crude oil has fallen sharply since mid-2014, when it was over US$100 a barrel, dropping below US$30 at the start of this year.

“I’m going to say that the market is cozying up to the fact that there will some quota limiting production by the OPEC members and Russia,” said Ian Nakamoto, director of research at 3MACS.

“There is still skepticism but it is probably the best hope we’ve had so far.”

Nakamoto anticipates oil prices will continue to climb and be closer to the US$60 a barrel mark by this time next year.

In other commodities, November natural gas dropped four cents to US$3.24, the December gold contract was down $4.50 to US$1,255.90 an ounce, and December copper contracts fell a penny to US$2.19 a pound.

— with files from The Associated Press

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