Most of Canada to receive emergency alert test today
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
North American stock markets staged a late-afternoon rally after plunging in early trading on fears about central bank moves and geopolitical risks in Ukraine along with a shaky start to the earnings season.
The S&P/TSX composite index ended the trading day down 50.09 points at 20,571.30 after dropping more than 700 points at midday.
At its lowest point Monday, the Toronto market was 7.6 per cent off its high to mark the worst dropoff since the start of the pandemic.
The situation in the United States was even more dire as all three markets moved into correction territory in early trading by falling at least 10 per cent below their recent highs. The tech-heavy Nasdaq composite was down as much 19.2 per cent while the S&P 500 was off 12.4 per cent.
However, all three U.S. markets rebounded and ended the day higher. The Dow Jones industrial average closed up 99.13 points at 34,364.50. The S&P 500 index added 12.19 points at 4,410.13, while the Nasdaq composite was up 86.21 points at 13,855.13.
Before the late recovery, Edward Jones investment strategist Angelo Kourkafas described the day as a "flash out."
"We have seen pretty indiscriminate selling and some panic which usually that's the type of conditions that mark the near term bottom or support. We'll see if that plays out," he said in an interview.
Investment sentiment has soured in recent months in anticipation of a shift in central bank policy toward monetary tightening and interest rate hikes to address inflation after using stimulus to tackle the effects of the COVID-19 pandemic.
The U.S. Federal Reserve and Bank of Canada are expected to outline their paths forward on Wednesday.
The early catalyst Monday was geopolitical uncertainty after the U.S. State Department ordered families of American personnel at the U.S. embassy in Ukraine to leave the country.
While fourth-quarter earnings have so far in aggregate beat expectations, concerns about margins and outlooks, first by U.S. banks, introduced some caution that profitability will be hurt by labour and other expenses, Kourkafas said.
All 11 major sectors on the TSX were down most of the day, but technology, consumer staples, consumer discretionary and health care ended Monday positive.
Technology climbed 1.8 per cent as Shopify Inc. ended up seven per cent after losing as much as 10.8 per cent earlier in the day. Even with the gain Monday, the Ottawa-based e-commerce company is down nearly 32 per cent so far in 2022 and 47 per off its high.
Energy was the biggest laggard, dropping 1.5 per cent as crude oil prices fell. Shares of Tourmaline Oil Corp. and Suncor Energy Inc. lost 4.0 and 2.6 per cent, respectively.
The March crude oil contract was down US$1.83 at US$83.31 per barrel and the March natural gas contract was up 9.3 cents at US$3.88 per mmBTU.
Some investors probably took some profits after oil prices had surged over several weeks and were up 70 per cent in one year, Kourkafas said.
The Canadian dollar traded for 79.01 cents US compared with 79.71 cents US on Friday.
Materials fell 0.8 per cent even though gold prices rose as a safe haven amid high inflation and geopolitical uncertainty.
The February gold contract was up US$9.90 at US$1,841.70 an ounce and the March copper contract dropped 11.2 cents to US$4.41 a pound.
This report by The Canadian Press was first published Jan. 24, 2022.
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
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