Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York July 6.Lucas Jackson/Reuters
Canadian stocks fluctuated, erasing earlier declines, as a rally by gold producers and health-care shares offset declines in banks after a report Wednesday showed the nation's trade deficit widened more than expected.
The S&P/TSX Composite Index rose 0.08 per cent, or 11.49 points, to 14,231.06 in Toronto, after earlier falling as much as 1 per cent. The benchmark trails New Zealand as the world's top-performing developed market in 2016, according to data compiled by Bloomberg.
Financial and energy shares were among the biggest drags on the S&P/TSX, as investors assessed data that showed the trade deficit in Canada held near a record high in May of $3.28-billion as exports of machinery and metals declined, worse than economists' forecasts for a $2.7-billion shortfall. The deficit follows an April figure revised higher to a record $3.32-billion, according to Statistics Canada.
The S&P/TSX remained little changed after minutes from the Federal Reserve's last meeting showed officials left interest rates on hold in June due to heightened uncertainties in the U.S. jobs market threatening their outlook. At their June 14-15 session, officials lowered their expectations for the number of times they'll increase rates this year, indicating they believed the economy's potential growth rate had dropped meaningfully, even before the U.K. referendum on June 23.
Canadian equities have swung between gains and losses since the Brexit vote in June as investors sought havens from the market volatility. Canadian government bond yields tumbled for a fifth day, touching the lowest level since February. Ten-year government bonds in the U.S., Australia, Japan, Germany, France and the U.K. sank to records. Gold jumped to the highest in two years.
Valeant Pharmaceuticals International Inc. surged 14.7 per cent, the most since May, after Walgreens Boots Alliance Inc. said in a third-quarter earnings call it was satisfied with its relationship with Valeant and willing to help Valeant be more successful.
U.S. stocks rose and the dollar slipped after minutes from the Federal Reserve's last meeting did little to alter perceptions for the timing of higher interest rates. Concern that fallout from the Brexit vote may spread drove demand for havens.
The S&P 500 Index held gains as the minutes indicated May's weak jobs report fuelled uncertainty among Fed officials about the economy, though data since, including a report on the service industries Wednesday, helped rekindle investor optimism. Treasuries fell and the dollar edged lower. Demand for havens grew on speculation Brexit could hamper global growth, with gains in bonds sending yields from Asia to Europe to record lows. The pound sank to its weakest in 31 years and a gauge of global equities faltered for a second day.
Fed officials held rates constant last month as heightened uncertainties about the labour market and financial stability threatened their outlook, the minutes showed two days before the next monthly jobs report. Policy makers also wanted to wait on the outcome of the Brexit vote that wound up roiling markets worldwide. Data Wednesday showed an unexpectedly rapid advance in the U.S. service sectors, suggesting the U.S. economy was gaining speed leading up to Britain's vote.
The Fed's meeting came before Britain's shock vote to exit the EU destabilized markets. Equities recouped much of those losses during a four-day rally on bets central banks will work to limit any fallout, but declines resumed as the first tangible signs of stress emerged. At least five asset managers froze withdrawals from U.K. real-estate funds, while concern rose that Italian banking troubles could spread.
"Everyone is trying to react to a situation we've never been in before," said Stewart Richardson, chief investment officer at RMG Wealth Management in London. "We've had shocks to the system before, but we haven't had one like this. And we won't know the answers for a long time."
The Dow Jones industrial average finished unofficially up 77.93 points, or 0.44 per cent, to 17,918.55, the S&P 500 gained 11.16 points, or 0.53 per cent, to 2,099.71 and the Nasdaq Composite added 36.26 points, or 0.75 per cent, to 4,859.16.
"The main takeaway from the minutes is the uncertainty in the mind of the Fed has increased, which we can all understand given the weak May jobs data and recent U.K. referendum," said Jon Adams, portfolio manager at BMO Global Asset Management in Chicago, where he helps oversee $217-billion. "This is another sign that the Fed's not going to do too much to upset the apple cart. They're looking for any excuse not to raise rates at this point."
The MSCI All-Country World Index dropped 0.6 per cent and the Stoxx Europe 600 Index slid 1.7 per cent, falling for a third day, with all its industry groups declining. Telecom companies and insurers were the biggest losers.
Deutsche Bank AG led losses in a gauge of European lenders as BlackRock Inc. cut the region's shares to underweight, with a negative view on the euro area's banking sector, amid the Brexit fallout.
The MSCI Emerging Market Index dropped 1.4 per cent, falling for a second day. Shares in South Korea slid 1.9 per cent and Taiwan's benchmark slid 1.6 per cent, while stock indexes in South Africa and Poland both fell at least 1.1 per cent.
The yield on 10-year Treasury notes, the global benchmark for sovereign bonds, fell as much as six basis points to 1.318 per cent, before advancing to 1.3817 per cent.
Yields on 10-year government bonds in Australia, Japan, Germany, France and the U.K. sank to records. Securities in the Bloomberg Global Developed Sovereign Bond Index, with an average life of about 10 years, yield a record-low 0.40 per cent.
Declining prospects of a Fed rate hike have spurred a torrent of demand for Treasuries, generating more than half a trillion dollars in gains for global investors.
Gold climbed to a two-year high as investors sought a haven from the tumult in financial markets, with UBS Group AG saying bullion is probably at the beginning of its next bull run.
Gold for immediate delivery gained 1 per cent to $1,369.66, after touching the highest since March 2014. Silver advanced 0.9 per cent to $20.115 an ounce, taking its gain this year to 45 per cent.
Oil prices rose almost 2 per cent on Wednesday as robust U.S. economic data lifted crude futures from two days of declines, although a gasoline glut and woes from Britain's European Union exit suggested more pressure ahead.
The pace of growth in the U.S. service sector was the fastest in seven months in June, an industry report showed.
The data alleviated some concerns about the impact of Brexit on global growth, boosting share prices on Wall Street and crude futures, which were down about 5 percent in the past two days.
Brent crude settled up 84 cents, or 1.8 per cent, at $48.80 a barrel. U.S. crude futures gained 83 cents, or 1.8 per cent, to settle at $47.43.
Oil prices also rose in anticipation that the U.S. government will report on Thursday a seventh straight weekly drop in crude stockpiles. A Reuters poll estimated a drop in crude inventories of 2.3 million barrels for the week ended July 1.
The American Petroleum Institute (API) will issue its own report on domestic oil stockpiles at 4:30 p.m. ET, before Thursday's official data.
"Big selloffs before oil statistics have a tendency to get some correction and that's what we saw today," said Pete Donovan, broker at Liquidity Energy in New York.
With files from Reuters