Canada's main stock index opened lower Tuesday as weaker commodities prices weighed on energy and materials stocks. On Wall Street, key indexes were also in the red at the start of trading, with rate worries and worries about the U.S. budget standoff weighing on sentiment.
ET, the Toronto Stock Exchange's S&P/TSX composite index was down 61.06 points, or 0.31%, at 19,739.55.
The Dow Jones Industrial Average was down 144.20 at the open, or 0.42%, at 33,862.68. The S&P 500 dipped below 24.56 points, or 0.57%, to 4,312.88, while the Nasdaq Composite dropped 90.36 points, or 0.68%, to 13.180.96 at the opening bell.
s about the impact of another federal government shutdown on the U.S. economy and its credit rating, Minneapolis Fed President Neel Kashkari said he expects another Fed rate to rise before the end of the year, helping to further boost the U.S. dollar as well as yields.
Moody's has become the latest ratings agency to warn about the potential impact of the current budget crisis in the US. The U.S. now faces a Sept. 1 deadline for Congress to provide funding for the fiscal year. If failure to reach an agreement could lead to disruption of government functions and thousands of federal workers laid off without pay. The government's debt payments would not be affected, unlike a similar exchange earlier this year.
In Canada, The Globe's Eric Atkins reports that the Unifor union is beginning contract talks with General Motors on Tuesday, days after its members narrowly approved a three-year contract with Ford Motor Co. of Canada. The agreement, which offers pay increases of almost 20 percent, including inflation top-ups and $10,000 signing bonuses, will set the pattern for the GM negotiations.
Wall Street will get earnings from Costco Wholesale Corp. after the close of trading today.
Overseas, the pan-euro-European STOXX 600 was down 0.42 percent by midday. Britain's shares FTSE 100 edged up 0.20 per cent, the biggest gain in a week. France's CAC 40 and Germany's DAX were both down 0.59 per cent and 0.63 per cent.
In Asia, Nikkei fell 1.11 percent to 1,11. In Asia, Japan's Nikkei finished down 1.11 per cent. Hong Kong's Hang Seng lost 1.48 per cent to close at 1,48 per cent.
Crude prices were down in early trading, driven by a stronger U.S. dollar and worries about the impact of a weaker global economy on demand.
In the early premarket period, Brent's day range was at US$91.80 to US$93.36. West Texas Intermediate's range range was from US$88.19 to US$89.91. Both benchmarks were down more than 1 per cent in the early premarket period.
Early Tuesday, the U.S. dollar reached its highest level in 10 months, buoyed by a surge in bond yields. The value of crude for investors of other currencies is now higher due to a stronger greenback.
Despite recent comments suggesting interest rates will stay higher for longer to tame inflation, officials from several central banks have fuelled growth concerns, fueling fears about the impact on demand.
s movement due to surging U.S. bond yields following the Fed's hawkish stance last week, CMC market analyst Tina Teng said.
Gold prices fell by a one-week low despite the dollar's move up by the U.S. dollar.
Gold slid 0.2 per cent to its lowest since Sept. 15 at $1911.54 per ounce by early Tuesday, while U.S. gold futures fell 0.3 per cent to US$1,930.30.
The Canadian dollar was lower on the eve of weak risk sentiment and weaker crude prices, while the U.S. dollar hit a 10-month high against a group of world currencies.
The day range on the loonie was 74.07 cents to 74.36 cents in the early premarket period. Over the last month, the Canadian dollar has experienced a gain of 0.49 per cent against the greenback.
Shaun Osborne, Scotiabank's chief FX strategist, said the company's chief market strategist, Charles Osborne, said.
The U.S. dollar index, which tracks the greenback against a variety of currencies, was up 0.11 percent at 106.07 on the global market, according to data from Reuters. The index rose to 106.2, its best level since November.
Reuters reported that the euro was mostly flat compared to the US dollar at US$1.0588, after hitting its lowest since March at US$1.057.
The British pound fell to its lowest level since mid-March at US$1.2168, and was last down 0.34 percent at US$1.2171.
The yield of the U.S. 10-year note was down slightly, at 4.519 per cent. Earlier, the yield of the 10-year Treasury notes rose as high as 4.566 percent, a 16-year peak, according to Reuters.
On Tuesday, the activist investor Engine Capital urged Parkland to reduce its debt and announce new share buyback plans. The investor urged the company to use proceeds from asset sales to pay down about $600-million over the next two years, the company said in its latest letter to the board. Engine owns about 2.5% of Parkland, which has a long-term debt of $6.28 billion as of June 30. U.S. S&P CoreLogic Case-Shiller Home Price Index for July.
U.S. FHFA House price index for July.