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Canadian Market In Negative Territory In Cautious Trade

The Canadian market is languishing in negative territory Tuesday afternoon, led by losses in energy and healthcare sections, in cautious trade.

Data showing a drop in manufacturing sales in the month of July is weighing on the market a bit.

Investors are also reacting to the data from U.S. Labor Department that showed consumer prices increased by slightly less than expected in the month of August.

The benchmark S&P/TSX Composite Index, which is moving in a narrow range, is down 61.80 points or 0.3% at 20,604.61.

Tilray Inc. (TLRY.TO), down nearly 3%, is the most prominent loser in the Healthcare Index. Organigram Holdings (OGI.TO) is down 2.8%, Canopy Growth Corp (WEED.TO) is lower by 2.4% and Cronos Group (CRON.TO) is declining 2.2%, while Aurora Cannabis (ACB.TO) and Bausch Health Companies (BHC.TO) are down 2% and 1.4%, respectively.

In the energy sector, Parex Resources (PXT.TO), Cenovus Energy (CVE.TO), Canadian Natural Resources (CNQ.TO), Suncor Energy (SU.TO) and Enerplus Corp (ERF.TO) are down 1.4 to 1.7%.

Baytex Energy (BTE.TO) and Crescent Point Energy (CPG.TO) are gaining 3.5% and 1.2%, respectively, on strong volumes.

Teck Resources (TECK.B.TO) is gaining 5.3% on impressive volumes. B2Gold Corp (BTO.TO) is up 1.8%.

BCE Inc. (BCE.TO), Bombardier Inc. (BBD.B.TO), Maxar Technologies (MAXR.TO), AutoCanada (AC.TO) and Precision Drilling (PD.TO) are notably lower.

Data released by Statistics Canada this morning showed manufacturing sales in Canada dropped by 1.5% from a month earlier to C$ 59.6 billion in July 2021, following an upwardly revised 3.6% rise in June and compared to a preliminary estimate of a 1.2% decrease.

The U.S. Labor Department said its consumer price index rose by 0.3% in August after climbing by 0.5% in July. Economists had expected consumer prices to increase by 0.4%.

The somewhat tame U.S. inflation data generated optimism that the Federal Reserve may delay plans to begin scaling back stimulus. However, comments from economists suggest the central bank might begin tapering its asset purchases in December.

The Fed is scheduled to hold a monetary policy meeting next week, with many expecting the central bank to provide an update on the outlook for its asset purchase program.

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