TORONTO — North American stock markets responded to headlines about a potential war in Europe and fell to start the week on word the U.S. will close its embassy in Kyiv.
Markets were a little stronger in earlier trading Monday after Russian Foreign Minister Sergei Lavrov suggested talks with the West could continue about security grievances that avoids a military conflict with Ukraine.
But investor mood soured after the U.S. said it would move embassy personnel to western Ukraine near the Polish border.
"So it's just this silliness of commentaries and people speaking and the market just reacting to any headline that comes out," said Allan Small, senior investment adviser at IA Private Wealth.
He said market volatility is exacerbated by computer programs that prompt buying or selling based on varying headlines.
Small pointed to the market selling off last week after St. Louis Federal Reserve president James Bullard called for a 50 basis point interest rate hike in March.
The market didn't respond to the same extent Monday when he repeated his call for a full one per cent hike by June, after other Fed officials publicly disagreed with him.
"He seems to be the only one that wants to front load everything," Small said in an interview.
The S&P/TSX composite index closed down 196.33 points to 21,352.51 after losing as little as 39 points in earlier trading.
In New York, the Dow Jones industrial average was down 171.89 points at 34,566.17. The S&P500 index was down 16.97 points at 4,401.67, while the Nasdaq composite was down 0.23 of a point at 13,790.92.
Materials and telecommunications were the lone sectors to gain Monday. The metals sector rose slightly as gold prices strengthened on geopolitical worries.
The April gold contract was up US$27.30 at US$1,869.40 an ounce and the March copper contract was up slight at US$4.51 a pound.
Agnico Eagle Mines Ltd. increased 5.2 per cent.
Health care, financials and energy were the biggest laggards on the day.
The sector that includes cannabis producers lost four per cent with shares of Canopy Growth Corp. falling 8.5 per cent.
Financials decreased 1.3 per cent as bond yields dropped from last week's high, although 10-year U.S. treasuries were up on the day.
Energy was also down 1.3 per cent even though crude oil prices spiked above US$95 a barrel, also on geopolitical angst.
The March crude contract was up US$2.36 at US$95.46 per barrel and the March natural gas contract was up 25.4 cents at US$4.20 per mmBTU.
Vermillion Energy Inc. and Baytex Energy Corp. shares decreased 2.8 and 2.5 per cent, respectively.
The Canadian dollar traded for 78.51 cents US compared with 78.73 cents US on Friday.
This report by The Canadian Press was first published Feb. 14, 2022.
Companies in this story: (TSX:VET, TSX:BTE, TSX:WEED, TSX:AEM, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press
