TORONTO — Amid light volumes, Canada's main stock index closed lower on Tuesday, its first day of trading after the holiday weekend, while U.S. indexes fell back from record highs set on Monday.
"At this point, given the tumultuous year that we've had and the extreme volatility that we 've seen, it seems like investors are perfectly happy to just kind of take a few days off and not do much," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
"It's not unusual in the week between Christmas and New Year's for trading to be fairly light and markets not to do very much. There's not a lot of news out today."
In New York, the Dow Jones industrial average closed down 68.30 points from its record close of 30,335.67 on Monday. Similarly, the S&P 500 index was down 8.32 points at 3,727.04, while the Nasdaq composite was down 49.20 points at 12,850.22.
U.S. stocks rallied Monday after President Donald Trump signed into law the US$900 billion coronavirus economic relief package. But on Tuesday, markets fell as investors shifted money away from technology companies, industrial and financial stocks.
In Toronto, the S&P/TSX composite index closed down 80.45 points at 17,543.43, about 500 points ahead of where it was last year at this time but well short of its record high close of 17,944.10 set on Feb. 20, 2020.
"In a lot of ways, it's related to composition and currency more than the nature of the underlying economies," said Cieszynski, comparing markets in the two countries.
"The Canadian dollar has been increasing over the last few months, which does put a bit of a drag on Canada relative to the U.S.," he said.
Canada's higher weighting in banks and commodities means the index reflects those sectors' slower recovery from the slump caused by the COVID-19 pandemic, while U.S. markets have been fuelled by more technology and communications companies, he added.
The Canadian dollar jumped to 78.09 cents US compared with 77.91 cents US on Dec. 24.
The shallow sell-off in Toronto was broad-based with only five of 11 sectors closing higher and none more than 0.5 per cent higher.
The steepest declines were in health care, down 3.4 per cent, as marijuana producers Aurora Cannabis Inc. and Canopy Growth Corp. both fell by almost six per cent.
In information technology, Sierra Wireless fell $1.20 or 6.3 per cent to $17.75.
The utilities sector had the strongest gains on the day, led by TransAlta Renewables Inc., up $1.25 or 6.02 per cent, to $22.00.
The energy sector finished slightly lower despite a 38 cent US increase in the February crude contract to US$48.00 per barrel and a rise in the February natural gas contract of 12 cents US to US$2.44 per mmBTU.
Materials sector stocks were little changed as the February gold contract was up $2.50 at US$1,882.90 an ounce and the March copper contract was down almost two cents at US$3.56 a pound.
— By Dan Healing in Calgary
This report by The Canadian Press was first published Dec. 29, 2020.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X, TSX:ACB, TSX:WEED, TSX:RNW)
The Canadian Press
Note to readers: This is a corrected story. An earlier version had a typo in the byline