Canadian Stocks Move Sharply Lower Amid Worries About Bond Yields

(RTTNews) - Extending the pullback seen over the two previous sessions, Canadian stocks showed a significant move to the downside during trading on Friday.

After coming under pressure early in the session, the benchmark the benchmark S&P/TSX Composite Index saw further downside in late-day trading before closing down 233.17 points or 1.2 percent at 19,115.64.

Concerns about the recent surge in treasury yields continued to weigh on Canadian stocks, with the yield on the U.S.' benchmark ten-year note climbed above 5 percent for the first time since July 2007.

The recent advance by yields reflects ongoing worries about the outlook for interest rates, with the Federal Reserve signaling rates will remain higher for longer than previously anticipated.

Fears the Israel-Hamas war may escalate into a broader regional crisis also contributed to the negative sentiment on Bay Street.

Israeli Defense Minister Yoav Gallant told troops gathered at the Gaza border on Thursday that they would soon see the Palestinian enclave "from inside."

Additionally, reports emerged that U.S. troops are being targeted at several military bases across Iraq and Syria, while a U.S. Navy warship destroyed cruise missiles and drones fired toward Israel by Houthi rebels in Yemen.

Telecom stocks turned in some of the market's worst performances on the day, with the S&P/TSX Capped Communications Index plunging by 2.1 percent.

Financial, utilities and real estate stocks also saw considerable weakness, while energy stocks came under pressure amid a downturn by the price of crude oil.

In Canadian economic news, a report from Statistics Canada said Canadian retail sales edged down 0.1 percent to C$66.1 billion in August.

Statistics Canada said sales were down in six of nine subsectors and were led by decreases at motor vehicle and parts dealers.

Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, fell by 0.3 percent during the month.