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TORONTO — Canada's main stock index closed down more than 300 points Monday as utility and energy stocks led widespread losses, while U.S. markets were mixed. 

The S&P/TSX composite index ended down 364.09 points, or 1.86 per cent, at 19,177.18 as the price of crude oil fell as part of a wider pullback.

In New York, the Dow Jones industrial average was down 74.15 points at 33,433.35. The S&P 500 index was up 0.34 points at 4,288.39, while the Nasdaq composite was up 88.45 points at 13,307.77.

The hit to markets came as U.S. bond yields climbed, triggered in part from a funding deal in the U.S. government, said Jules Boudreau, a senior economist at Mackenzie Investments. 

"What's been driving the increase in rates and the underperformance of bonds is the fact that the government avoided the shutdown, at least for a few more weeks. That was a big risk for bonds," said Boudreau.

"So, overall, equity markets are down because of these higher bond yields."

The rising bond yields also came as the outlook for higher-for-longer interest rates continues to settle in, but U.S. technology stocks performed well anyway, he said.

"It's a very weird day when you look at price action. You've got bonds under a lot of pressure with the higher-for-longer trade coming in. But at the same time, you have the usually interest rate sensitive big tech stocks in the U.S. that are outperforming."

Canadian stocks were hit harder because of the overweight towards energy and materials.

The November crude oil contract was down US$1.97 at US$88.82 per barrel and the November natural gas contract was down nine cents at US$2.84 per mmBTU.

"The oil moves we saw were probably a little bit overdone," said Boudreau.

The December gold contract was down US$18.90 at US$1,847.20 an ounce and the December copper contract was down 10 cents at US$3.64 a pound.

The declines helped push down the TSX energy index by 2.4 per cent, while financials fell 1.8 per cent.

The utilities index was down 3.7 per cent as Enerflex Ltd., a Calgary-based energy services firm that's counted as a utility, fell 27 per cent after announcing its chief financial officer resigned, the second time that's happened in less than a year.

The Canadian dollar also fell Monday, trading for 73.66 cents US, according to XE.com, compared with 73.96 cents US on Friday.

Weaker GDP numbers out on Friday was likely a main driver for the pullback, though most currencies were falling against the U.S. dollar on Monday, said Boudreau. 

"We got GDP data last Friday that is supporting the fact that we are going into recession, I think it's pretty clear in Canada," he said. 

"So that's definitely not helped the Canadian dollar."

This report by The Canadian Press was first published Oct. 2, 2023.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD) 

Ian Bickis, The Canadian Press