The close: Energy stocks push TSX lower

Global equity markets edged lower on Tuesday, weighed by weak Chinese business surveys and a tumble in shares of Google parent Alphabet, while the euro strengthened on the heels of data that showed euro zone growth topped expectations.

Shares of Alphabet dropped 7.5 per cent, making it the biggest drag on the Nasdaq a day after it hit record levels, as the company reported its slowest revenue growth in three years. Fellow heavyweight Apple is scheduled to report results after the market close on Tuesday.

“People are definitely taking some profits off names like Apple, Google. There could be a little ‘peaking’ mentality here considering how indexes are at record levels, people tend to get a bit cautious,” said Jeremy Bryan, portfolio manager at Gradient Investments in Arden Hills, Minnesota.

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“Large-cap companies have generally reported better-than-expected numbers but not the kind that would accelerate a rally.”

Equity markets were also on shaky footing after surveys on China manufacturing missed forecasts, another sign that Beijing’s efforts to spur growth in the world’s second-biggest economy had yet to take hold.

Investors were looking ahead to a policy statement from the U.S. Federal Reserve on Wednesday and payrolls data at the end of the week. The Fed is largely expected to leave interest rates unchanged as it seeks to balance solid economic growth against low inflation.

For the day, the Dow Jones Industrial Average rose 38.11 points, or 0.14 per cent, to 26,592.5, the S&P 500 gained 2.78 points, or 0.09 per cent, to 2,945.81 and the Nasdaq Composite dropped 54.09 points, or 0.6per cent, to 8,107.77.

Despite the disappointing Alphabet results, corporate profits for the quarter are now showing growth of 0.7 per cent, according to Refinitiv data, which has helped ease worries about a possible earnings recession.

After seesawing between gains and losses, European stocks ended flat as bank weakness undercut encouraging euro zone data indicating economic growth in the first quarter was much stronger than expected and the unemployment rate fell to its lowest in more than a decade.

Canada’s main stock index was little changed on Tuesday, as an unexpected contraction of economic growth soured investor sentiment.

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The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 19.64 points, or 0.12 per cent, at 16,580.73.

The Canadian economy unexpectedly shrank by 0.1 per cent in February, pulled down in part by weakness in the mining sector and bad weather that hurt rail transport, Statistics Canada data showed.

Underscoring weakness in railroads, Canadian National Railway Co blamed higher operating expenses due to prolonged extreme cold weather for a lower-than-expected quarterly profit. Its shares fell 1.4 per cent.

Five of the index’s 11 major sectors were lower, including the energy sector, which sat 1.2 per cent lower.

Tech stocks jumped 1.8 per cent after Shopify Inc. raised its 2019 earnings forecast and posted a surprise quarterly profit on Tuesday on strong demand for its software that helps retailers sell goods online. Its shares were up 7.5 per cent to a record high.

Leading the index were Interfor Corp, up 3.8 per cent, and Aphria Inc., higher by 2.9 per cent.

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Lagging shares were Hexo Corp., down 6.0 per cent, Ensign Energy Services Inc., down 6.0 per cent, and CES Energy Solutions Corp., lower by 5.1 per cent.

The pan-European STOXX 600 index rose 0.01 per cent and MSCI’s gauge of stocks across the globe gained 0.10 per cent.

The encouraging regional data helped the euro strengthen to above $1.12 for the first time in a week to a high of $1.1230. The dollar remained subdued against a basket of major currencies even after a round of upbeat data on housing and consumer confidence.

The dollar index fell 0.41 per cent, with the euro up 0.31 per cent to $1.122.

Oil prices pared their gains on Tuesday, after global benchmark Brent crude rose above $73 a barrel, as the market grew less worried that a rebellion against Venezuelan President Nicolas Maduro would hit the country’s crude exports.

Brent crude futures hit a session high of $73.27 per barrel and settled 76 cents, or 1.1 per cent, higher at $72.80. Last week, Brent hit a six-month high above $75.

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U.S. crude futures closed at $63.91, up 41 cents, or 0.7 per cent, on the day, after hitting a session high at $64.75.

Prices rose after Venezuelan opposition leader Juan Guaido called for military backing to end Maduro’s rule, but pared gains after the government said state-run oil company PDVSA’s operations were not disrupted and top military leaders remained loyal.

Reuters