BNN Bloomberg's closing bell update: July 11, 2019
TORONTO -- Canada's main stock index moved lower Thursday even as the Dow Jones industrial average closed above 27,000 for the first time.
The Dow rose primarily on the White House killing its own rebate rule designed to ease costly medications for those on Medicare by letting them receive rebates that drug makers now pay to insurers and middlemen.
That helped United Health Group Inc., whose shares climbed 5.4 per cent and pushed the Dow up 227.88 points at 27,088.08.
Other U.S. stock markets were relatively flat a day after responding positively to the Federal Reserve chairman's confirmation that interest rates will likely be cut in a couple of weeks. The S&P 500 index was up 6.84 points at 2,999.91, while the Nasdaq composite was down 6.49 points at 8,196.04.
"The market-moving news really came yesterday with Jerome Powell's comments and investors' interpretation of that that he was still looking at interest rate cuts," says Anish Chopra, managing director with Portfolio Management Corp.
Bank of Canada governor Stephen Poloz suggested Wednesday that the central bank will keep rates steady despite movement south of the border.
With the futures market up earlier in the day, a second strong day in equity markets could have been expected but it largely didn't materialize, Chopra said in an interview.
"Just a quiet day with no real follow on from the news from yesterday."
The S&P/TSX composite index lost 35.39 points at 16,527.90, with CannTrust Holdings Inc. continuing a string of declines since it disclosed some production was done in unlicensed growing rooms.
Eight of the 11 major sectors were lower led by health care which fell 2.9 per cent. CannTrust's problems pushed its shares down almost two per cent on the day and 37.5 per cent since Monday when it announced an investigation by Health Canada. Several other cannabis producers also saw their share prices decrease.
The materials, real estate, utilities, financials, technology, consumer staples and energy sectors were also lower.
Materials dropped as the price of gold fell after hovering around a six-year high.
The August gold contract was down US$5.80 at US$1,406.70 an ounce and the September copper contract was down 0.65 of a cent at US$2.69 a pound.
The energy sector was down marginally as crude prices dropped.
The August crude contract was down 23 cents at US$60.23 per barrel and the August natural gas contract was down 2.8 cents at US$2.42 per mmBTU.
Telecommunications, industrials and consumer discretionary were slightly higher on the day. Cogeco Inc. was the big winner, gaining 6.2 per cent following the release of its third-quarter results and comments from the CEO that there's still room to introduce "reasonable" price increases despite competition from other technologies.
The Canadian dollar traded at an average of 76.51 cents US, up compared with Wednesday's average of 76.38 cents US.
The loonie rose as interest rates are moving along different paths in the two countries, said Chopra. Expected cuts by the Fed are putting pressure on the U.S. dollar while stable rates by the Bank of Canada are strengthening the Canadian dollar.