The Toronto Stock Exchange was down Tuesday morning amid concern about the strength of China’s economy.
Advertisement
“It’s in a very nervous place right now, if it (the price of oil) breaks down a couple more dollars it could be very, very ugly”, said John Kinsey, a portfolio manager at Caldwell Securities.
“It’s a commodity economy as far as the market is concerned”, he said.
September copper shed 3.05 cents to US$2.32 a pound, and the September contract for natural gas fell 7.3 cents to US$2.728 per thousand cubic feet.
“The end of the summer driving season and the start of refinery maintenance season will weigh on near-term demand and pressure prices”, said Societe Generale oil analyst Michael Wittner.
Overseas, Japan reported its recovery stalled in the April-June quarter, with gross domestic product contracting at a 1.6 per cent annual pace as a result of weaker domestic demand and slowing exports, which fell 16.5 per cent from a year earlier.
“The good data on housing is certainly helpful since its 4 per cent of the U.S. GDP”, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
At 9:46 a.m. ET (1346 GMT) the Dow Jones industrial average was down 44.33 points, or 0.25 percent, at 17,500.85, the S&P 500 was down 5.88 points, or 0.28 percent, at 2,096.56 and the Nasdaq composite was down 20.02 points, or 0.39 percent, at 5,071.68.
“As you get more negativity about oil and it feeds on itself, people go away”, he said.
Yet Cieszynski said the long-term prospects for oil really are negative, and that it will take years before oil returns to its previous high as Iranian supplies are added to the global market and global growth continues to be anemic.
Advertisement
“I’d say the basics in Canada relative to U.S. suggests the Canadian greenback ought to keep at present ranges or decrease”, he stated.
