Pache.co Information Technologies

5:15 p.m.

TSX closes down more than 300 points, U.S. stock markets mixed

Canada’s main stock index closed down more than 300 points today 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 at 19,177.18.

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 Canadian dollar traded for 73.66 cents U.S., according to XE.com, compared with 73.96 cents U.S. on Friday.

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 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.

1:22 p.m.

Arajet enters Canada’s crowded budget airline market

Arajet, a discount airline based in the Dominican Republic, says it will launch flights between that country and Toronto and Montreal this fall.

The announcement by the year-old carrier marks the latest entrant to an already crowded field of low-cost airlines, and comes two weeks after U.S. budget carrier Breeze Airways made a pitch to Quebecers bound for Florida.

Unlike many low-price players, Arajet chief executive Victor Pacheco says his will bank on a hub-and-spoke model that connects passengers from far-flung airports via the airline’s hub of Santo Domingo, his home country’s capital.

As proof, he says well over half of the 10,000-plus Arajet tickets sold to Canadians so far are for other destinations in the Caribbean and Central and South America, to be reached via connecting flights from the Dominican Republic.

Though no other airlines fly direct between that country and Canada, Air Canada, United Airlines and American Airlines all touch down there regularly, while rapidly expanding discount carriers such as Flair Airlines and Lynx Air try to woo Canadians with cheap flights to an array of sunny destinations.

Backed by majority investor Bain Capital, the 10-aircraft Arajet will launch direct routes to Santo Domingo from Toronto and Montreal on Oct. 24 and Nov. 7, respectively, with one-way trips starting at $98.

Canadian home prices are too rich for higher interest rates, Paul Beaudry says

Current home prices in Canada can’t be justified if medium-term interest rates stay elevated, a former Bank of Canada official said, underscoring the risk to one of the country’s most important sectors.

Paul Beaudry, who spent four years on the central bank’s rate-setting committee, said the outlook for the housing market remains highly dependent not only on the policy rate, but on longer-term fixed rates. If they don’t come down, “then it becomes much more difficult to support these valuations,” he said on BNN Bloomberg Television.

The benchmark price of a home in Canada was $757,600 in August, up 40 per cent in five years — with most parts of Ontario and Quebec seeing much larger price increases. Canadian homeowners, unlike their U.S. counterparts, don’t have the option of locking in rates for 30 years. Most borrowers have rates that are fixed for five years or fewer, or they have floating-rate mortgages that rise and fall with the Bank of Canada rate.

That has left many households stretched after rates jumped in the past 18 months. The five-year Canada government bond yield has risen nearly 150 basis points since hitting its 2023 low in March, putting significant upward pressure on mortgage rates. Royal Bank of Canada economists wrote last week the overall cost of home ownership in Vancouver, Toronto, Montreal and other cities is “still near all-time worst levels.”

The company says subway riders will be able to connect to its 5G network while in the Line 1 stations and tunnels in the so-called Downtown U from Union Station north to St. George and Bloor-Yonge, plus Spadina and Dupont stations. The area encompasses all of the subway stops in Toronto’s downtown core.

The federal government had set a deadline of Tuesday for all passengers on the TTC subway system to have cellular connectivity, regardless of their carrier. It has also set a Dec. 20 deadline for the companies to negotiate commercial agreements to provide service on the subway over the long term.

Llewellyn, the first woman to lead a major Canadian bank, departs after the Montreal-based lender concluded a review of strategic options without a sale. In September, it said it would try to ramp up its current strategy, which includes growth in commercial lending and technology upgrades.

“Eric is the right executive to lead the bank at this critical point in its evolution,” said Michael Boychuk, who was appointed chair of the board as Michael Mueller resigned. “We have experienced challenges recently and the board is confident that Eric will successfully focus the organization on our customer experience and operational effectiveness.”