Slumping energy sector hurts TSX

The Toronto Stock Exchange followed a lower oil price to close in the red Tuesday, snapping an 11-day streak of gains.

The S&P/TSX composite index shed 17.52 points to close at 16,144.79, dragged down by the energy sector where shares lost an average of 0.87 per cent of their worth. The July crude contract, meanwhile, fell 15 cents to US$72.20 per barrel. The fall came on a day that started out positively for energy and oil, with the commodity’s price reaching a high of US$72.90 earlier in the day.

The shift came after reports OPEC may be looking to raise oil production soon, said Dominique Barker, vice president with CIBC Asset Management.

Sources told Reuters the Organization of the Petroleum Exporting Countries is considering raising output as early as next month to cool the rallying market.

Also dragging down the index was tech firm Shopify Inc. — the second worst performing share of the day on the index, down 6.12 per cent or $11.59 to $177.66. The slip came as Adobe Systems announced Monday it agreed to buy Shopify’s competitor Magento Commerce for US$1.68 billion.

In New York, the Dow Jones industrial average fell 178.88 points to 24,834.41. The S&P 500 index fell 8.57 points to 2,724.44 and the Nasdaq composite index retreated 15.58 points to 7,378.46.

For most of the day stocks were on track for small gains. U.S. automakers rose after China said it will reduce duties on imported cars in July, a sign the U.S. and China could resolve some of their differences on trade. Banks climbed as Congress prepared to loosen some of the rules that have governed the industry since the 2008 financial crisis.

U.S. stocks rose Monday, a holiday for the TSX, as investors grew more hopeful that the trade dispute between the U.S. and China will be resolved without major effects on the global economy. But Marina Severinovsky, an investment strategist at Schroders, said the two countries appear to be looking for easy wins without addressing larger and more difficult issues, like China’s technology policies and its handling of intellectual property.