Traders work on the floor of the New York Stock Exchange Nov. 24.Brendan McDermid/Reuters
Canadian stocks rose on Tuesday as commodities producers jumped with the price of oil after Turkey shot down a Russian warplane near the border with Syria.
Equities in Canada rallied and U.S. stocks pared declines after a Kremlin spokesman said Russian President Vladimir Putin didn't talk of military consequences for Turkey. The materials sector advanced at least 2 per cent in Canada to lead equities higher.
Turkey's action near the border with northwestern Syria marked the first direct clash between the foreign powers embroiled in the civil war and sparked selling in global equities in morning trading. Canada's resource-rich equity market rose as crude rallied on speculation supplies from the Middle East may be disrupted.
Bombardier Inc. fell 4.8 per cent after predicting a decline in profit next year. Crescent Point Energy Corp. and EnCana Corp. jumped at least 3.7 per cent.
The Standard & Poor's/TSX Composite Index rose 25.45 points, or 0.19 per cent, to 13,407.83 in Toronto. The index has pared declines for the year to 8.2 per cent, trailed only by Singapore and Greece among developed markets.
Russian President Putin accused Turkey of being an accomplice of terrorism and warned of "very serious consequences" for their relations. The escalating tension in the region comes with Brussels on the highest-level terror alert and after the U.S. State Department issued a global alert for Americans.
Raw-materials and energy producers, which account for almost 30 per cent of Canada's benchmark stock index, were two of the four industries among 10 in the S&P/TSX to advance. Consumer staples stocks added 0.2 per cent after Alimentation Couche-Tard Inc. posted second-quarter earnings ahead of estimates and boosted its dividend.
Encana jumped 6.5 per cent and Cenovus Energy Inc. added 1.7 per cent as the energy sector rallied 1.9 per cent. Oil futures rose 2.7 per cent in New York.
"Geopolitical worries and terrorism have had a growing impact on the market the last few weeks," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said. "There's a lot of oil that travels through the region and the threat has grown. The stakes just went up and the geopolitical risk premium has reinflated."
West Texas Intermediate for January delivery climbed $1.12 to close at $42.87 a barrel on the New York Mercantile Exchange. It's the highest settlement since Nov. 11. The volume of all futures traded was 10 per cent lower than the 100-day average.
Brent for January settlement increased $1.29, or 2.9 per cent, to end the session at $46.12 a barrel on the London- based ICE Futures Europe exchange. The European benchmark crude closed at a $3.25 premium to WTI.
Saudi Arabia strives to "cooperate with all oil producers and exporters, from inside and outside of OPEC, to preserve the stability of the market and prices," the nation's cabinet said in a statement. Last week, Oil Minister Ali al-Naimi said the country is a reliable supplier and the nation cooperates with OPEC and countries outside the group to stabilize the market.
Energy and raw-materials producers, along with health-care stocks, have fallen at least 20 per cent this year to lead declines in the S&P/TSX. A combination of slowing economic growth in China and a rally in the U.S. dollar due to impending interest-rate increases from the Federal Reserve as soon as December have crimped commodities prices.
Bombardier fell for a third day of losses. The struggling planemaker predicted a drop in 2016 earnings at its annual investor day in New York amid lower output of its biggest current business jets and costs from the oft-delayed C Series airliner.
U.S. stocks erased earlier losses as investors shook off concerns over the downing of a Russian warplane by Turkish forces, and energy shares rallied for their first back-to-back gains in three weeks.
Commodity companies led a rebound, with raw-materials joining energy to rise the most among S&P 500's main groups. Airlines slumped along with travel-related shares after a government warning to American travelers abroad coupled with a jump in crude prices.
The Standard & Poor's 500 Index rose 0.1 per cent to 2,08.54 in New York, after earlier falling as much as 0.8 percent. The gauge has gone without two straight winning sessions since Nov. 3.
The Dow Jones industrial average rose 21.18 points, or 0.12 per cent, to 17,813.86, while the Nasdaq Composite added 0.33 points, or 0.01 per cent, to 5,102.81.
"When you see this type of uncertainty happening, it reinforces looking at the U.S. as a safe haven," said Tom Anderson, who helps oversee about $8-billion as chief investment officer at Boston Private Wealth. "The U.S. economy is in very solid shape. We're pretty positive on equities as a result. But there's certain to be noise and volatility around those events."
While global financial markets were jolted by concerns that the situation could escalate, political analysts in Russia and Europe said that seemed unlikely given the risks associated with any conflict between Russia and a NATO member. The incident comes with Brussels on the highest-level terror alert and after the U.S. State Department issued a global alert for Americans.
The geopolitical tensions overshadowed data Tuesday that showed the economy expanded at a faster pace in the third quarter than previously reported, bolstering the Federal Reserve's case for raising borrowing costs for the first time since 2006. Traders are now pricing in a 74-per-cent probability that the Fed will increase interest rates next month.
A separate report showed home prices climbed more than estimated in September compared to a year earlier, signalling residential real estate is sustaining momentum. Another gauge showed consumer confidence unexpectedly fell in November to the lowest since September 2014.
Stocks struggled to add to an advance following the S&P 500's strongest weekly gain this year, with the gauge little changed from its Friday close. The benchmark is 2 per cent away from its May record after rallying 12 per cent from a summer swoon and its first correction in four years.