2-hour wildfire evacuation notice issued for some Fort McMurray neighbourhoods
A wildfire evacuation alert for some Fort McMurray residents has been updated to a two-hour evacuation notice.
Higher bond yields hurt the technology sector and sparked a broad-based decline in North American stock markets.
Last week's Federal Reserve announcement that it would soon begin to taper stimulus was felt in the bond market, prompting U.S. 10-year treasuries to increase to 1.55 per cent.
And Fed chairman Jerome Powell reinforced that move when he told the Senate banking committee that inflation could persist longer than expected.
"This is causing a fairly aggressive sector rotation, so we're seeing (relative) strength in the financials and energy, and some of the industrials," said Greg Taylor, chief investment officer of Purpose Investments.
"But what we're seeing on the other side of that is fairly aggressive selling in technology."
High-growth companies whose values are closely linked to future earnings are hurt by higher yields because people are less interested in paying a higher multiple for these stocks, Taylor said in an interview.
The S&P/TSX composite index closed down 289.28 points to 20,174.14 after hitting an intraday low of 20,128.06.
In New York, the Dow Jones industrial average was down 569.38 points at 34,299.99. The S&P 500 index was down 90.48 points at 4,352.63, while the Nasdaq composite was down 423.29 points or 2.8 per cent at 14,546.68.
Canada's main stock index didn't suffer losses as deep as its U.S. counterparts because it has fewer big-cap tech companies than U.S. markets do.
Technology led all 11 major sectors on the TSX that lost ground Tuesday. It plunged 3.8 per cent as shares of Hut 8 Mining Corp. lost 6.6 per cent with Shopify Inc. down 4.8 per cent and Lightspeed off 4.1 per cent.
Consumer discretionary, health care and real estate were the next largest laggards.
Energy was the best performing sector, falling slightly amid a dip in crude oil prices and ongoing increases in natural gas due to supply shortages in Europe.
The November crude oil contract was down 16 cents at US$75.29 per barrel and the November natural gas contract was up 14.9 cents at US$5.88 per mmBTU.
The Canadian dollar traded for 78.86 cents US compared with 79.13 cents US on Monday.
The sector has enjoyed some price spikes as a pull-back in drilling and exploration in the last couple of years is hurting supply.
"But people are coming back to it as they're seeing the economics get way better and there could be some profit-taking in the next little bit because some of these companies have almost gone up 100 per cent in the last month," Taylor said.
"It still feels like this is a trend that's going to happen, and if we get a cold winter, we could see prices go up a lot more."
Financials were helped by higher yields but fell along with the broader market, losing less than one per cent.
Industrials were also down with Air Canada shares losing 2.6 per cent.
Materials was also lower as metals prices fell.
The December gold contract was down US$14.50 at US$1,737.50 an ounce and the December copper contract was down 4.3 cents at US$4.25 a pound.
Although the gold sector hasn't had a good year, Taylor said Tuesday's announced merger of equals between Agnico Eagle Mines Ltd. and Kirkland Lake Gold Ltd. would create the world's third-largest gold company.
Kirkland shares lost 7.8 per cent while Agnico's were off 1.2 per cent, suggesting that investors believe financial terms of the deal may have to change or another bidder may enter the picture.
"When you see Kirkland down more than Agnico in a merger of equals, you have to wonder if the Kirkland shareholders are going to hold out for a little more and maybe make Agnico bump the price in their favour."
Taylor said the next thing for investors to watch is the earnings season that will start in about a week. Recent warnings from FedEx, Nike and Adobe have people more cautious.
"We got to get through earnings before we can set the tone and move higher, so it's probably going to be safe to expect a little more volatility until we get through earning season and then go from there."
This report by The Canadian Press was first published Sept. 28, 2021.
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