Title : Energy weighs on TSX, loonie moves lower
link : Energy weighs on TSX, loonie moves lower
Energy weighs on TSX, loonie moves lower
Aleksandra Sagan, The Canadian Press</span>
Published Wednesday, May 23, 2018 12:41AM EDT
Last Updated Wednesday, May 23, 2018 5:02PM EDT
The price of oil dragged down Canada's main stock index Wednesday, while indices south of the border made gains on positive news from the Federal Reserve.
The S&P/TSX composite index fell 10.99 points to 16,133.80 as the price of oil continued to fall. The July crude contract fell 36 cents to US$71.84 per barrel.
Shares in the energy sector lost an average of 1.05 per cent of their worth.
"There was a big report today," said Michael Currie, vice-president and adviser at TD Wealth.
"The oil benchmarks all took a dive because the U.S. crude and gasoline inventories had an unexpected build up."
U.S. commercial crude inventories increased by 5.8 million barrels in the week ending May 18, according to a weekly petroleum status report from the U.S. Energy Information Administration.
Analysts expected about 1.9 barrels, said Currie.
Meanwhile, in New York, markets rebounded. The Dow Jones industrial average gained 52.40 points to 24,886.81, the S&P 500 index advanced 8.85 points to 2,733.29 and the Nasdaq composite index rose 47.50 points to 7,425.96.
U.S. President Donald Trump's recent comments about trade and being unhappy with deals pulled markets down in recent days, said Currie, but they got a boost after the Federal Reserve released the minutes from a meeting held over two days at the start of the month.
The minutes of the Fed's May 1-2 meeting released Wednesday showed that officials were generally upbeat about the prospects for the economy and said that the next rate hike would "likely soon be appropriate." Many economists expect that hike to happen at the next meeting in mid-June.
The Fed pretty much guaranteed at least two interest rate hikes this year, Currie said, with one in June and a second in September. It also left the door open for a third.
A gradual path of interest rate hikes eased investor worries about slowing economic growth should the opposite path be taken.
The Canadian dollar averaged 77.66 cents US, down 0.55 of a U.S. cent.
In commodities, the July natural gas contract rose about two cents to roughly US$2.96 per mmBTU. The June gold contract shed US$2.40 to US$1,289.60 an ounce and the July copper contract retreated about six cents to US$3.07 a pound.
With a file from the Associated Press
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