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Canadian Market In Negative Territory As Technology, Materials Shares Slide

The Canadian stock market is languishing in negative territory with moderate losses a little past noon on Friday, after opening on a weak note despite fairly strong jobs data.

Worries about coronavirus pandemic and its impact on the economy continue to haunt investors. The impasse over a coronavirus relief package in the U.S., and rising tensions between the U.S. and China are further weighing on sentiment.

Healthcare, materials and information technology stocks are down sharply. Shares from utilities, industrial and energy sections are finding good support, while financial, consumer discretionary and telecom stocks are turning in a mixed performance.

The benchmark S&P/TSX Composite Index, which dropped to a low of 16,508.91, is down 36.50 or 0.22% at 16,542.60 about half an hour past noon.

In the healthcare section, Bausch Health Companies (BHC.TO) shares are plunging more than 8%, reversing previous session's gains. Canopy Growth Corp (WEED.TO), Cronos Group (CRON.TO) and Aphria Inc. (APHA.TO) are down 2.2 to 2.5%, while Aurora Cannabis (ACB.TO) is declining by about 1%.

Among materials shares, First Quantum Minerals (FM.TO), Ssr Mining (SSRM.TO), Iamgold Corp (IMG.TO), Alacer Gold (ASR.TO), Lundin Mining (LUN.TO), Oceanagold (OGC.TO), B2Gold Corp (BTO.TO), Torex Gold Resources (TXG.TO) and Hudbay Minerals (HBM.TO) are down 3 to 8%.

Information technology stocks Kinaxis Inc. (KXS.TO) and Contellation Software (CSU.TO) are down 5.6% and 4.7%, respectively. Celestica Inc. (CLS.TO) and Descartes Systems Group (DSG.TO) are also down sharply.

Ritchie Bros Auctioneers (RBA.TO), up nearly 10%, tops the list of gainers in the industrials section. Ballard Power Systems (BLDP.TO) is moving up 2.7%. Badger Daylighting (BAD.TO), SNC-Lavalin Inc. (SNC.TO), Canadian National Railway (CNR.TO), Canadian Pacific Railway (CP.TO) and Ats Automation (ATA.TO) are gaining 1 to 2%.

In the energy sector, Whitecap Resources (WCP.TO) is advancing 5.2% and Tourmaline Oil Corp (TOU.TO) is gaining nearly 4%. Canadian Natural Resources (CNQ.TO), Arc Resources (ARX.TO) and Crescent Point Energy (CPG.TO) are up 2 to 3%.

Enerplus Corp (ERF.TO) is gaining about 2.1%. The company reported adjusted net loss was $41.2 million, or $0.19 per share for the second quarter compared to adjusted net income of $74.4 million, or $0.32 per share in the second quarter of 2019.

Magna International Inc. (MG.TO) reported a loss of US$647 million or $2.17 per diluted share in the second quarter, compared with a profit of US$452 million or $1.42 per share a year earlier. The share is up marginally a little past noon.

Linamar Corp. (LNR.TO) reported a net loss of $37.9 million or 58 cents per diluted share for the second-quarter, compared to a net profit of $150.2 million or $2.28 per share in the same quarter of 2019. The stock is down by about 0.5%.

In economic news, data released by Statistics Canada this morning showed the Canadian economy created 418,500 jobs in July of 2020, easing from a record 952,900 in the previous month. However, the numbers came in above market expectations.

Full Time Employment in Canada increased by 73,200 in July of 2020, while part time employment decreased to 345,300 in July from 464,800 in June of 2020.

The unemployment rate in Canada dropped to 10.9% in July 2020, easing further from April's record high of 13.7%.

Meanwhile, the Ivey PMI for Canada rose to 68.5 in July 2020 from 58.2 in the previous month. The index had touched an all-time low of 22.8 in April. July reading is the highest for the index since April 2018.

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