Photo: The Canadian Press

TORONTO — Surging global COVID-19 infections and lagging U.S. stimulus talks sent North American stock markets lower to start the week with Canada’s main index facing a broad-based decline led by energy.

“The tone in the markets here today is decisively risk off,” said Candice Bangsund, portfolio manager for Fiera Capital.

Weekend virus numbers were worrisome, particularly in the U.S. which hit record new daily cases and seven-day averages that surpassed the mid-July spike.

“A big part of what’s worrying investors is, of course, the rise in cases and the potential for renewed restrictions on activity that would potentially weigh on the recovery,” she said in an interview.

That’s despite “fairly constructive” news on the vaccine front, with Johnson & Johnson, along with AstraZeneca, restarting their late-stage trials following temporary halts and with AstraZeneca test results regarding immunity.

“There’s been a lot of positive news on the vaccine front over the last several days, but the markets have largely shrugged off that positive news and are focusing here on the near-term fiscal stimulus deliberations as well as the spike in COVID cases,” Bangsund said.

The two factors are also prompting investors to crystallize some profits following market resilience up to October.

Bangsund said she believes markets will be predominantly focused on COVID until the numbers move decisively lower.

The S&P/TSX composite index closed down 224.53 points or 1.4 per cent to 16,079.55.

In New York, the Dow Jones industrial average was down 650.19 points or 2.3 per cent at 27,685.38. The S&P 500 index was down 64.42 points at 3,400.97, while the Nasdaq composite was down 189.34 points at 11,358.94.

The Canadian dollar traded for 75.75 cents US compared with 76.10 cents US on Friday.