U.S. stocks were set for the highest closing level on record, led by energy companies, as oil jumped on optimism OPEC will agree to cut output. The dollar halted its longest winning streak versus the euro.
The S&P 500 Index surpassed its Aug. 15 closing high of 2,190.15, the Dow Jones Industrial Average was also set for an all-time high, and the Russell 2000 Index rose for a 12th day in its longest rally since 2003.
At 11:30 a.m., the Dow was up 47.53 points, or 0.25 per cent, at 18,915.46, the S&P 500 gained 11.24, or 0.52 per cent, to 2,193.14, and the Nasdaq added 31.63, or 0.59 per cent, to 5,353.15.
In Toronto, the S&P/TSX composite index rose 121.8 points, or 0.82 per cent, to 14,985.84. It was led higher by a nearly 3 per cent gain by the energy sector and a 1.7 per cent gain by materials stocks.
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The most influential movers on the index included Suncor Energy Inc, which rose 2.2 per cent to $42.71, and Canadian Natural Resources Ltd, up 2.1 per cent to $43.93.
Both major oil producers have gained around 9 per cent since Nov. 11.
The Canadian dollar also gained, up half a cent to 74.51 cents (U.S.).
In economic data, Canadian wholesale trade unexpectedly fell 1.2 per cent in September from August, dropping for the first time in six months after a series of strong gains, Statistics Canada data indicated on Monday.
Shares in TransAlta Corp, the country's largest operator of coal-fired plants, declined 2.7 percent to $5.47 after the government of Canada announced on Monday it will virtually eliminate the use of traditional coal-fired electricity by 2030.
Oil extended gains as Iran signalled optimism that OPEC will agree to a supply-cut deal and Iraq said it will offer new proposals to help bolster the group's unity before members meet next week in Vienna. The dollar's decline versus the euro was its first in 11 days. Treasuries rose.
The new milestone for the S&P 500 arrived as companies ended a five-quarter profit slump and Donald Trump's election fuelled optimism that his plans to cut taxes and boost fiscal spending will benefit industries more geared toward economic growth. Acknowledging the strength in the economy, Federal Reserve Chair Janet Yellen said Thursday that the central bank is close to lifting interest rates, comments that sent Treasuries lower and yields on the 10-year note toward 2.25 per cent.
"There's optimism that it's more likely that Trump is going to put us on an economic fast track versus Clinton," said Terry Morris, manager director of equities at BB&T Institutional Investment Advisors in Wyomissing, Pennsylvania. "The election had something to do with this, and I also think there's some short covering going on. People that were hedging the election had to rush to cover after the news, and I think generally the perception is the economy is starting to pick up as the Fed is likely to raise rates in December."
Investors have boosted bets for tighter monetary policy since Donald Trump's election win, on speculation his policies will spur growth and increase inflation. After Ms. Yellen said last week the central bank is close to raising rates, traders are now pricing in a 98 per cent chance of a move in December. If the Fed doesn't act as expected, it may bring on more market turmoil, says Seven Investment Management's Ben Kumar.
Energy shares rallied Monday, following crude higher, after Iran signaled optimism OPEC will agree to a supply-cut deal and Iraq said it will offer new proposals to help bolster the group's unity before members meet next week. Chesapeake Energy Corp. and Murphy Oil Corp. led gains. Tyson Foods Inc. tumbled after posting earnings that missed estimates and appointing Tom Hayes to succeed Donnie Smith as chief executive officer.
The Bloomberg Commodity Index, which measures returns on raw materials, advanced 1.7 per cent, set for its first two-day gain since Oct. 24.
Oil rose as much as 2.8 per cent in New York, adding to last week's 5.3-per-cent gain. Iranian Oil Minister Bijan Namdar Zanganeh said it's "highly probable" OPEC will reach a consensus, according to comments published by Shana news service. Iraq will make proposals at the meeting to help reach an agreement, Oil Minister Jabbar Al-Luaibi said. Goldman Sachs Group Inc. said it's got a "tactically bullish" outlook on a "stronger OPEC-cut rationale."
"Market players are positioning themselves for higher prices, and oil will be in the $50 (U.S.) to $55 range if there is a deal," said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. "OPEC members are building a lot of expectations and taking too much exposure to let a deal fail."
U.S. two-year note yields were little changed at 1.06 per cent, according to Bloomberg Bond Trader data. Benchmark 10-year yields fell four basis points, or 0.04 percentage point, to 2.32 per cent.
Investors who buy at Monday's U.S. two-year note sale risk losing money as the Federal Reserve raises interest rates, according to Nomura Holdings Inc., one of the 23 companies that trade with the central bank.
"You'd probably want to be a little bit cautious going into this auction, given the fact that the market continues to sell off," said John Gorman, head of non-yen rates trading for Asia and the Pacific at Nomura in Tokyo. "There are some people expecting three hikes next year. The market's only pricing in maybe one." The two-year yield will rise to 1.25 per cent in six months, he said.
Two-year yields, among the most sensitive to what the Fed does with its benchmark, climbed earlier to 1.08 per cent, approaching the highest level since 2010. Bonds have slumped and yields surged this month on expectations President-elect Donald Trump's spending plans will lead to faster inflation. The Fed will increase rates for the first time in a year when it meets next month, futures contracts indicate.
Bloomberg News