Canada’s main stock index reached its highest-ever level on Wednesday amid rising hopes for a strong reading on U.S. job creation and traders caught up to two positive manufacturing reports that were released while the TSX was closed for Canada Day.
The S&P/TSX composite index gained 61.32 points to 15,207.33. The Canadian dollar was up 0.05 of a cent to 93.77 cents (U.S.).
U.S. indexes lost early momentum as the Dow Jones industrials slipped 0.33 of a point to 16,955.74, the Nasdaq was down 2.98 points to 4,455.67 and the S&P 500 index rose 0.47 of a point to 1,973.79.
On Tuesday, the Dow and the S&P 500 entered the second half of 2014 trading by hitting new records after data showed that Chinese manufacturing grew in June for the first time in six months. In the U.S., the manufacturing sector advanced for a 13th straight month of growth. Other data out Wednesday showed that U.S. factory orders fell by 0.5 per cent in May, a steeper drop than the 0.3 per cent that had been forecast.
Traders looked ahead to the other major economic event for the week – the release Friday of the U.S. government’s employment report for June. Ahead of that data, U.S. payrolls firm ADP reported that the private sector created 281,000 jobs during June, much higher than the 205,000 reading that had been forecast. The reading raised hopes that the government will show that the economy cranked out more than the 210,000 level that economists have forecast.
“Clearly, now the market is going to set up for a bullish number,” said Wes Mills, chief investment officer at Scotia Private Client Group.
“It does seem risk-on is coming back. People have been reluctant to fully endorse this rally and we know the fears that have popped up, whether it’s Ukraine or China or more recently this Iraq business. But it does seem the market is shaking all of these things off.”
In corporate news, JPMorgan Chase chairman and chief executive Jamie Dimon said he has curable throat cancer. Dimon said he plans to remain on the job and be actively involved in key decisions while undergoing treatment. Despite the reassurance, Dimon’s illness could raise leadership concerns at one of the world’s biggest banks. The bank’s shares declined 68 cents to $57.18 (U.S.).
In Canada, shares in Canadian Pacific Railway Limited were $2.69 higher to $196 after the carrier was upgraded by equities research analysts at CIBC from a “sector perform” rating to an “outperform” rating. Earlier this week, analysts at Barclays raised their price target on shares of Canadian Pacific Railway Limited from $168 to $196.00.
TSX advancers were led by the base metals component, up 2.9 per cent as July copper gained four cents to $3.25 a pound.
The information technology sector was up 1.68 per cent as BlackBerry ran up 40 cents or 3.66 per cent to $11.34 (Canadian). The stock has surged lately, up about 40 per cent in the past month amid strong quarterly financial results and enthusiasm over its new product. BlackBerry’s Passport, which meets somewhere between a smartphone and a tablet in size, is scheduled to launch in Europe this September.
The energy sector was ahead 0.3 per cent with August crude on the New York Mercantile Exchange down seven cents to $105.27 (U.S.) a barrel.
The gold sector shook off early declines to move up 0.45 per cent while August bullion rose $4 to $1,330.60 an ounce.