Brutal Day on Markets

It was a session traders would prefer to forget, as indices fell without a parachute, amid inflation numbers and general economic uncertainty.

The S&P/TSX plunged 389.63 points, or 1.9%, to close a rough day at 20,101.38.

The Canadian dollar backtracked 0.45 cents at 77.62 cents U.S.

Health-care stocks weighed heaviest, with Bausch Health Companies down $1.24, or 8.8%, to $12.92, while Tilray sank 37 cents, or 5.6%, to $6.21.

Consumer discretionary stocks were wounded as well, with BRP Inc. falling $8.30, or 8.2%, to $93.18, while Canada Goose Holdings landed hard, $1.93, or 7.2%, to $24.73.

Consumer staples toppled Wednesday, with Jamieson Wellness off $2.38, or 6.7%, to $32.91, while Alimentation Couche-Tard slouched $3.29, or 5.7%, to $54.61.

On the economic slate, Statistics Canada reports the Consumer Price Index (CPI) rose 6.8% on a year-over-year basis in April, up from a 6.7% gain in March. On a seasonally adjusted monthly basis, the CPI increased 0.7% in April.

Elsewhere, Alberta Premier Jason Kenney told a U.S. Senate committee Tuesday Canada could add over a million barrels per day (bpd) of oil export capacity to the United States over the next two years. Kenney also called for a new cross-border oil pipeline.

ON BAYSTREET

The TSX Venture Exchange plunged 21.32 points, or 3%, to 691.17.

All 12 TSX subgroups were pointed face down, with health-care slumping 4.4%, consumer discretionary stocks down 4.1%, and consumer staples fading 4%.

ON WALLSTREET

The Dow Jones Industrial Average headed for its biggest loss since 2020 on Wednesday after another major retailer warned of rising cost pressures, confirming investors’ worst fears over rising inflation and rekindling the brutal 2022 selloff.

The index tumbled 1,164.52 points, or 3.6%, to close a disastrous session at 31,490.07, its first loss in four days.

The S&P 500 weakened 165.17 points, or 4%, to 3,923.68, also the worst drop since 2020.

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The NASDAQ Composite unloaded 566.37 points, or 4.7%, to 11,418.15.

Markets returned to heavy selling after two back-to-back quarterly reports from Target and Walmart stoked investor fears of rising inflation.

It’s the fifth Dow decline of more than 800 points this year, which all occurred as the stock sell-off intensified within the last one month.

Target shares tumbled more than 27% Wednesday after the retailer reported first-quarter earnings that were much lower than Wall Street estimated because of higher costs for fuel and compensation. The retailer also saw lower-than-expected sales for discretionary merchandise like TVs.

Target’s report comes right after Walmart on Tuesday posted earnings that fell short of expectations as it too cited higher fuel and labour costs. Walmart shares ended Tuesday lower by 11%. They were down another 7% on Wednesday.

Amazon’s stock price dropped 6.6%, and Best Buy’s stock price fell more than 11%. Dollar General’s fell more than 11%, and Dollar Tree’s declined more than 15%. Shares of Macy’s dropped 12%, while shares of Kohl’s fell more than 10%.

Lowe’s fell more than 6% after missing sales expectations in its first quarter report as shoppers bought fewer supplies for outdoor projects.

TJ Maxx-parent TJX Companies bucked the overall negative trend, with shares surging 6% after the retailer reported an earnings beat.

Treasury prices gained ground, lowering yields to 2.88% from Tuesday’s 2.99%. Treasury prices and yields move in opposite directions.

Oil prices dropped $3.13 at $109.27 U.S. a barrel.

Gold prices removed $3.70 to $1,815.20 U.S. an ounce.