TSX, Wall Street finish lower amid weak commodities, Trump tweet on drug prices

TORONTO — North American stock markets slid Tuesday amid slumping commodity prices and concerns stoked by Donald Trump about the pharmaceutical industry.

The U.S. president said in a tweet that he's working on a "new system" to bring drug prices lower. It was the first time Trump has mentioned how he plans on bringing more competition into the drug industry, a sector he has criticized in the past.

The comment sent drugmaker stocks lower on both sides of the border.

In Toronto, the S&P/TSX composite index lost 20.97 points to 15,608.78, with health care incurring the biggest sector losses and metals and materials companies also weighing on the commodity-heavy index.

On Wall Street, the Dow Jones industrial average fell 29.58 points to 20,924.76, the S&P 500 index shed 6.92 points to 2,368.39, and the Nasdaq composite index pulled back 15.25 points to 5,833.93.

Todd Mattina, chief economist and strategist at Mackenzie Investments, said investors still remain nervous about what will eventually shake out from Trump's policies.

"There's a lot of uncertainty about Donald Trump's economic program and these tweets are taken as a signal about what his potential policy priorities will be," he said.

Shares in several U.S. hospital operators also fell sharply after Republicans announced Monday a health-care proposal to replace the Affordable Care Act, more commonly known as Obamacare. This was third loss in four days for U.S. stocks.

Trading has been tepid across American markets as investors look ahead to Friday's U.S. jobs report for February.

If the data meets expectations or exceeds them, it will be an indication that the U.S. economy is continuing to strengthen and will give the U.S. Federal Reserve even more reason to raise interest rates at its meeting from March 15 to 16.

A strong jobs report will also be an important gauge of how the economy has fared in the first full month under the Trump administration. Trump was elected on promises of robust economic growth and job creation.

Mattina said that the markets have priced in a 98 per cent chance that the Fed will hike rates next week, especially if it still plans on following a schedule of three raises this year.

The central bank has been hinting in the past few weeks that it's ready to make a move.

"The Fed's usual strategy is to avoid surprises," Mattina said.

In currencies, the Canadian dollar declined 0.03 of a U.S. cent to 74.54 cents US.

Meanwhile, commodities were negative across the board, as the April crude contract dipped six cents at US$53.14 per barrel and April natural gas contracts were down eight cents at US$2.82 per mmBTU.

The April gold contract fell $9.40 at US$1,216.10 an ounce and May copper contracts were down three cents to US$2.62 a pound.


Follow @LindaNguyenTO on Twitter.

Linda Nguyen, The Canadian Press

Read More: Business


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