TORONTO — Weakness in the technology sector weighed on North American stock markets Monday while the loonie shot up after “hawkish” comments about the economy by the Bank of Canada’s second in command.
The S&P/TSX composite index was down 89.41 points to 15,383.80 at the close.
The TSX came under pressure from information technology stocks including BlackBerry (TSX:BB), which saw its shares drop 74 cents or 4.98 per cent to $14.11. CGI Group (TSX:GIB.A) fell 99 cents or 1.47 per cent to $66.15.
In New York, stock indexes slipped again Monday as U.S. technology companies suffered a second day of sharp losses. Apple (NASDAQ:AAPL) shed $3.56 or 2.39 per cent to US$145.42. Google parent Alphabet (NASDAQ:GOOGL), Facebook and Microsoft also sank, as other 2017 top performers like Activision Blizzard, Netflix and Skyworks Solutions tumbled.
The tech-heavy Nasdaq composite index fell 32.45 points to 6,175.47, while the Dow Jones industrial average lost 36.30 points at 21,235.67 and the S&P 500 index shed 2.38 points to 2,429.39.
The technology sector has made strong gains this year but investors are selling some of the best-performing stocks, said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis.
“I don’t necessary view this as a crack in the overall bull market that’s going to get larger,” he said.
“But I do think it’s a reflection of the fact that after the tremendous gains that we’ve seen over the past couple of months and couple of years, investors are looking for areas where they can perhaps trim some of the winners — and tech is obviously a standout in that space.”
In Canada’s technology sector, where the field is fairly thin, Fehr said the drop in share prices was likely “indicative of the indiscriminate selling we’re seeing in the tech sector now.”
In currencies, the Canadian dollar was up 0.21 of a U.S. cent to an average trading price of 74.54 cents US, following a speech Monday by the Bank of Canada’s Carolyn Wilkins.
The senior deputy governor said the central bank is encouraged by a broadening of economic strength, which includes gains across 70 per cent of industries.
Experts noted how the speech was filled with increased optimism about the economy’s trajectory.
“The hawkish nature of the speech is the first acknowledgment from the bank that the next move is likely to be a hike,” CIBC’s Royce Mendes wrote in a research note to clients.
In commodities, the July crude contract was up 25 cents at US$46.08 per barrel and the July natural gas contract was down two cents at US$3.02 per mmBTU.
The August gold contract was down US$2.50 to US$1268.90 an ounce and the July copper contract was down three cents at US$2.62 a pound.
