Energy Shares on Toronto Stock Exchange fall causing seven-week low

NRGexpert
Weak oil prices are in part responsible for Canada’s main stock index falling to a more than seven-week low at the end of January. The Toronto Stock Exchange’s S&P/TSX composite index had fallen 103.02 points.
The energy sector was hit hard as it retreated 2.2% in the wake of U.S. crude prices falling as a result of rising output of crude from the United States. Suncor Energy and Canadian Natural Resources both suffered as well, falling 1.5% and 1.7% respectively.
However, outside of the energy sector, other companies did not fare quite as badly. Indeed, Thomson Reuters performed contrary to the general downward trend as its share price went up 9.3% after there was talk that Blackstone Group has moved forward with its plan to purchase a majority stake in one of Thomson Reuters’ key units.
Aurora Cannabis and Canopy Growth Co were among the most active Canadian stocks by volume, falling 6.6% and 6.3% respectively. Stocks in the U.S. also fell drastically with the Dow Jones tumbling over 350 points, reinforced by an increase in bond yields and a drop in healthcare companies.
The drop in healthcare companies came as it was announced that Amazon, Berkshire Hathaway and JP Morgan are planning to create a joint venture, which will aim to lower healthcare costs for their employees in the United States. Indeed, the entire S&P health sector took a 1.6% hit – the largest drop among the 11 major sectors. United Health dropped 4.3%, one of the highest on the Dow list and Cigna fell 6.4%, making it the most active on the S&P 500.
Elsewhere, the long-dated yields held by the U.S Treasury rose in turbulent trading as we brace ourselves for events this week, including a Federal Reserve monetary policy decision, which could help us better predict interest rates for the coming year. Furthermore, a two-day Fed meeting will be closely watched for anything said that could increase the chance of rates being hiked four times, as opposed to the usual three.
Robert Pavlik, a chief investment strategist at SlateStone Wealth commented: "Investors are getting a bit worried about inflation which has led some people to believe that the Fed might be more aggressive when it comes to raising rates."
The Dow also dropped almost one full percentage point (248.23 points) with a session low of a 352 point drop. The S&P 500 was also down 20.43 points (0.71%) and the Nasdaq Composite was down 42.7 points (0.57%). Meanwhile, the CBOE Volatility Index, which gauges the fears of investors, rose as much as 14.69. This is its highest level since last August.
Pavlik explained: "I think despite this selloff, all indications point to a firming economy and I do expect to see some bargain hunters step in soon."
Some of the world’s most prominent companies saw their shares tumble during this bearish period. Pfizer dropped 3%, Harley-Davidson 7.7% and MetLife 8.7%. Apple also saw its shares go down another 0.6% in the wake of its announcement that it will halve the production of its brand new iPhone X.


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