A screen displays a chart on the floor of the New York Stock Exchange Jan. 14.Brendan McDermid/Reuters
Canada's main stock index rose on Thursday after falling to a fresh 2-1/2-year low, as a rally in crude oil prices helped support energy stocks, while losses were unwound for financial stocks.
The benchmark equity gauge jumped 1.36 per cent, or 165.6 points, to 12,336.03. Canada's resource-rich index was the second of seven countries to see its benchmark enter a bear market, capping a 20-per-cent slide on Jan. 7.
Nine of the 10 main sectors on the index were higher.
U.S. stocks also rallied, with the Dow Jones Industrial Average surging 227.6 points after a 364-point rout Wednesday, as crude's advance past $31 (U.S.) a barrel boosted energy shares helped stabilize global markets rattled by China and falling commodity prices.
In Toronto, energy producers led gains, rising 4.3 per cent . Seven Generations Energy Ltd. was up 5.38 per cent, Enbridge Inc. increased 4.58 per cent and Suncor Energy Inc. rose 3.38 per cent. Oil and gas producers were the worst performers last year, plummeting 26 per cent.
Health-care stocks rose 2.7 per cent, led by Valeant Pharmaceuticals International Inc., which jumped 5.35 per cent.
Air Canada tumbled 8.52 per cent to its lowest level since October 2014. Raymond James downgraded the airline, citing a poor expansion strategy and it's capital expenditure commitments.
Magna International Inc fell 1.82 per cent, reversing a good part of Wednesday's rally when the company said it expected sales in its auto parts manufacturing business to rise about 15.7 per cent this year.
Canada's dollar fell, meanwhile, to its lowest since April 2003 with a further slide in crude prices expected to undermine the resource-based Canadian economy. That fuelled speculations of a rate cut from the Bank of Canada as early as next week.
The loonie was off 0.1 of a U.S. cent at 69.62 cents.
U.S. stocks rebounded on Thursday as investors snapped up battered shares including those in the energy sector, while financials rose after upbeat results from JPMorgan Chase & Co.
The Dow Jones industrial average rose 226.34 points, or 1.4 per cent, to 16,377.75, the S&P 500 gained 31.48 points, or 1.67 per cent, to 1,921.76 and the Nasdaq Composite added 88.94 points, or 1.97 per cent, to 4,615.00.
Close to 10 billion shares were traded in U.S. exchanges, the most for any day in nearly a month.
Oil rebounded on Thursday, snapping an eight-day rout, as investors covered short positions but the market settled not far from 12-year lows on worries Iran may add barrels to a glutted global market sooner than expected.
Global crude benchmark Brent broke below $30 a barrel, its lowest since 2004, for a second straight day before rebounding. It also settled off the day's highs, after the U.S. State Department indicated a key Iranian nuclear reactor had been destroyed, as per conditions for lifting sanctions against Tehran's oil exports.
"While the end of sanctions aren't finalized, we'll now be entering a world of even more supply," said Tariq Zahir at Tyche Capital Advisors in Long Island, NY.
"We feel the Saudis will pump even more and a price war between them and the Iranians will drive us well into the $20 levels. We are sellers of any and all rallies in days and weeks to come," said Mr. Zahir, an oil bear who mostly trades long-dated spreads in U.S. crude.
Brent settled up 72 cents, or 2.4 per cent, at $31.03 a barrel. Earlier in the session, it rose to $31.23 after falling to $29.73, its weakest since February 2004. Over the past eight sessions, Brent had lost about $7 a barrel, almost 20 per cent.
U.S. crude's West Texas Intermediate (WTI) also settled up 72 cents, or 2.4 per cent, at $31.20. It hit a 12-year low of $29.93 earlier this week.
With options for WTI's front-month February futures expiring, traders were covering short positions.
"Natural covering interest is buoying the market as many had $30 as an objective," said Pete Donovan, broker at Liquidity Energy in New York.
With files from Reuters