Recession fears gnawed at investors Thursday, sending indexes sharply down as the threat of higher interest rates made itself known.
The S & P / TSX fell hard, losing 295.52 points, or 1.6%, to close Thursday at 18,708.52.
The Canadian dollar dropped 0.11 cents to 77.02 cents US
Energy dragged, though, as Baytex Energy tailed off 73 cents, or 11.4%, to $ 5.57, while MEG Energy descended $ 2.25, or 11.9%, to $ 16.70.
Materials were also in lower territory, as First Quantum Minerals gave back $ 2.75, or 10.4%, to $ 23.76, while Hudbay Minerals slid 53 cents, or 9.2%, to $ 5.24.
Gold stocks also withered, as Kinross Gold faltered 24 cents, or 4.4%, to $ 5.17, and OceanaGold skidded 17 cents, or 6.2%, to $ 2.57.
Cannabis concerns strengthened, as Tilray grabbed 46 cents, or 11.1%, to $ 4.62, while Aurora Cannabis added 12 cents, or 7.1%, to $ 1.82.
In consumer staples, Empire Company hiked $ 2.30, or 6.2%, to $ 39.52, while Primo Water Corporation gathered 58 cents, or 3.5%, to $ 17.07.
Tech stocks tried to push back in the other direction, as Shopify leaped $ 31.48, or 7.2%, to $ 470.12, and Lightspeed climbed $ 2.19, or 7.6%, to $ 31.19.
Bank of Canada Senior Deputy Governor Carolyn Rogers said on Wednesday that inflation in Canada was much too high and did not rule out a 75-basis-point increase at the central bank’s July decision.
The TSX Venture Exchange flopped 11.96 points, or 1.9%, to 628.94.
Still, eight of the 12 TSX subgroups gained ground, with health-care and information technology both 4%, and consumer staples better by 1.6%.
The four laggards undid most of the good the gaining groups experience, with energy, retreating 6%, materials easing 4.6%, and gold, dulling 3.3%.
Stocks climbed in a late-day rally as bond yields slipped, and Wall Street continued to weigh recession risks.
The Dow Jones Industrials moved firmly into the green by the closing bell, advancing 194.23 points to 30,677.36.
The S&P 500 climbed 35.84 points, or 1%, to 3,795.73.
The tech-heavy NASDAQ jumped 179.11 points, or 1.6%, to 11,232.19.
The major averages are set for a positive week, with the Dow up 2.6%, the S&P 500 gaining 3.3% and the NASDAQ increasing 4% week to date.
A peek into the broader market index showed more defensive stocks such as consumer staples, utilities, real-estate and health-care stocks drove outperformance, with each sector up about 2%. Consumer staples stocks such as Clorox gained 6%.
Homebuilders helped buoy consumer cyclicals, as shares of Lennar gained 4.5% and DR Horton climbed 5.2%.
Meanwhile, energy was the worst performing sector in the S&P 500 as oil prices took a hit. Shares of Schlumberger dropped 6.8%. Valero Energy fell 7.6% and Phillips 66 declined 6.8%.
Airline stocks dragged down on transportation issues. Shares of United Airlines dropped 2.5% as it cut back on flights out of Newark by 12%. Shares of American Airlines dipped 0.9% after dropping service to four small US cities.
On Thursday, the US Labor Department said weekly jobless claims fell 2,000 to a seasonally adjusted 229,000 for the week ended June 18, though the labor market remains tight.
UBS is the latest investment bank this week to raise its odds of a recession to 69%, citing lackluster data last week in housing, industrial production and capital goods.
Citigroup increased its odds of a recession to 50%, citing a slide in consumer demand that could make it more difficult for the Federal Reserve to achieve a soft landing.
Goldman Sachs said the probability of a downturn is “higher and more front-loaded” than it was previously. In a Monday note, the firm raised its bet of a US recession to 30%, up from 15%, over the next year. It increased those odds to 48%, up from 35%, over the next two years.
On the other hand, a top strategist at JPMorgan on Thursday said he believes the US economy will dodge a recession altogether, with the stock market making back any losses in the back half of the year.
Treasury prices jumped, lowering yields to 3.09% from Wednesday’s 3.15%. Treasury prices and yields move in opposite directions.
Oil prices lost $ 2.22 to $ 103.97 US a barrel.
Gold prices ditched 11 dollars to $ 1,827.40 US an ounce.