Toronto market ends lower as rail stoppage threatens economy
4:57 pm Thursday, August 22nd, 2024
By Fergal Smith
TORONTO (Reuters) – Canada’s main stock index pulled back from a record high on Thursday as Toronto-Dominion Bank reported its first loss in over two decades and a railroad stoppage threatened to disrupt the domestic economy.
The S&P/TSX composite index ended down 84.26 points, or 0.4%, at 23,037.47, after posting a record closing high on Wednesday.
U.S. stocks also fell as central bank officials from around the world gathered in Jackson Hole for the annual Economic Symposium, with investors laser focused on Fed Chair Jerome Powell’s address on Friday for clues on the timing and extent of the Fed’s policy easing cycle.
Canada’s economy could shrink by billions of dollars this year after the country’s two biggest freight rail operators locked out workers affiliated with the Teamsters union on Thursday, after both companies and the union failed to conclude labor deals.
Still, shares of both companies, Canadian National Railway Co and Canadian Pacific Kansas City Ltd, ended higher.
“Given that rails are crucial for so many businesses, it’s difficult to see this being a prolonged lockout,” said Ben Jang, a portfolio manager at Nicola Wealth. “The government may step in sooner versus later.”
TD Bank shares fell 2.1% as the bank reported a quarterly loss after setting aside an extra $2.6 billion to cover expected fines from U.S. regulators, which have been probing weaknesses in Canada’s second-largest lender’s anti-money laundering controls.
It’s still to be seen how much scrutiny the bank could face as it tries to expand in the U.S. and how that “would impact future growth prospects,” Jang said.
The technology sector fell 1.5%, along with declines for U.S. tech stocks. The materials group, which includes metal miners and fertilizer companies, was down 1.6% as gold prices fell, giving back some recent record-setting gains.
(Reporting by Fergal Smith, editing by Deepa Babington)
