Fred Lum/The Globe and Mail
The Toronto stock market ran up almost 200 points Thursday morning as investors picked over stocks that were indiscriminately sold off in a series of huge declines this week that sent the TSX into correction territory.
The S&P/TSX composite index jumped 191 points to 14,043.95 on Thursday morning after a 343-point plunge Wednesday left the TSX down 12 per cent from its 2014 highs racked up in mid-summer. A drop of 10 per cent or more from recent highs is considered a correction.
"(The U.S. and Canadian) economies seem to be chugging along and, outside of the negativity on oil, there really doesn't seem to be any other negative data prints," said Kevin Headland, director of portfolio advisory group at Manulife Asset Management.
"So the fact that other sectors have been selling off along with energy names really didn't make much sense. And a low oil price can be positive for many, many other sectors, especially when you look at retail spending and input costs to manufacturing."
The Canadian dollar fell 0.36 of a cent to a 5 1/2 year low of 86.75 cents (U.S,).
A solid U.S. retail sales report for November also helped push markets higher.
New York's Dow Jones industrials surged 201.78 points to 17,734.93. The Nasdaq rose 69.21 points to 4,753.24 and the S&P 500 index was 26.7 points higher to 2,052.84.
U.S. retail sales perked up in November with the start of the holiday shopping season, rising 0.7 per cent, led by online buying and purchases of autos, clothing and electronics.
Oil prices were lower following Wednesday's slide of almost US$3 a barrel after OPEC cut its forecast for global demand for its oil. The January crude contract on the New York Mercantile Exchange edged down 30 cents to $60.64 (U.S.) a barrel and the much-battered energy sector gained 2.3 per cent. The group is still down more than 25 per cent year to date in a selloff that lumped in high-quality, low cost producers with companies that are more vulnerable to low oil prices because of higher debt and production costs.
Other TSX gains involved those sectors that have sold off as traders try to assess the damage that will be caused to the Canadian economy by oil prices that have fallen about 40 per cent since the summer. The sharp fall was sparked by lower demand prospects and an over-abundance of crude oil, thanks in large part to surging shale production in the U.S. and a refusal by OPEC to cut production to support prices.
Many energy companies have been reacting to sharply lower oil prices by cutting their capital spending estimates. Cenovus Energy joined that group Thursday as the company announced it is cutting 2015 capital spending to between $2.5 billion and $2.7 billion, down about 15 per cent from 2014 levels. Its shares climbed 21 cents to $21.31.
Other positive sectors included industrials, ahead 1.7 per cent, telcos were up 1.65 per cent while financials gained 0.8 per cent.
The gold sector was ahead 1.2 per cent with February bullion down $5.50 to $1,223.90 an ounce.
The base metals sector was up 0.7 per cent while March copper edged up three cents to US$2.92 a pound.
Elsewhere on the corporate front, Lululemon Athletica inc. posted quarterly profit of US$60.45 million or 42 cents a share, beating expectations of 38 cents a share. However, revenue of $419.4 million missed estimates of $424.7 million. Sales and revenue for the current quarter are also expected to come in weaker than forecast but its shares jumped $4 or 8.5 per cent to US$50.70.