Inflation Numbers Down South Cloud Interest Rate Hopes, TSX Down

Canada's main stock index fell on Thursday, led by declines in industrials and technology shares, as hotter-than-expected U.S. inflation data undermined interest rate cut hopes.

The TSX Composite Index saw its winning streak halted, at least for now, scaling back 99.33 points to begin Thursday at 27,894.10, after several days of new record highs.

The Canadian dollar dipped 0.29 cents to 72.42 cents U.S.

ON BAYSTREET

The TSX Venture Exchange slipped 2.14 points to 786.46.

The 12 TSX subgroups were evenly divided in the first hour on Thursday, with information technology tumbling 1.2%, while industrials withered 1%, and real-estate weakened 0.9%.

The half-dozen gainers were led by health-care, up 1.7%, gold battling 0.5% higher, and telecoms, up 0.2%.

ON WALLSTREET

Stocks slipped on Thursday after a new inflation report showed that wholesale costs rose more than expected last month.

The Dow Jones Industrial Average lost 72.17 points to 44,850.10.

The S&P 500 index faded 4.07 points to 6,462.51.

The NASDAQ dropped 7.02 points to 21,706.12.

In premarket trading Thursday, shares of Cisco fell 1% on the heels of the major tech company’s fourth-quarter results narrowly beating expectations. Deere shares lost more than 7% on mixed full-year guidance.

Investors came into the session riding high, with the S&P 500 and NASDAQ posting fresh record highs in the previous session. The benchmarks got a jolt earlier this week after the release of a cooler-than-expected consumer price inflation report for July.

That report stoked hopes among investors for a rate cut from the Federal Reserve at the end of its September policy meeting.

However, investors were left feeling disappointed after July’s producer price index reading indicated that such a rate cut is far from guaranteed.

Wholesale prices rose 0.9% on the month, much more than the 0.2% economists polled by Dow Jones were expecting. The index had come in flat in June. Wholesale prices can be a leading indicator for consumer prices.

Some traders were looking past this PPI number because the report showed the increase was driven by a large gain in “portfolio management,” along with airfare. Without those factors the figures would have been much closer to estimates.

Prices for 10-year Treasury lost ground Thursday, raising yields to 4.27% from Wednesday’s 4.24%. Treasury prices and yields move in opposite directions.

Oil prices hiked 88 cents to $63.53 U.S. a barrel.

Gold prices collapsed $25.20 to $3,382.40 U.S. an ounce.