Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, April 11.Michael Nagle/Bloomberg
Canadian stocks climbed on Monday, as commodities rallied amid signs of a pick-up in industrial demand in China.
The Standard & Poor's/TSX Composite Index rose 0.19 per cent, or 26.03 points, to 13,422.76 in Toronto. Six of the index's 10 main groups finished the session in negative territory.
Canadian equities joined a rally in global stocks, crude traded at a four-month high in London and gold advancing to the highest in almost three weeks. Copper erased an earlier loss as the dollar declined a second day. China's producer prices increased 0.5 per cent in March from February, the first gain in more than two years, data showed Monday.
The resource-dominant S&P/TSX remains tied to commodities prices, as a first-quarter rally fuelled by a resurgence in crude and gold prices has stalled to start the second. The Canadian benchmark now trades at 21.5 times earnings, about 15 per cent higher than the 18.7 times earnings valuation of the Standard & Poor's 500 Index, according to data compiled by Bloomberg.
Canadian Pacific Railway Ltd. climbed 2.62 per cent to the highest level since Dec. 3, after the railroad operator ended efforts to buy U.S. competitor Norfolk Southern Corp. and the takeover plan backed by investor Bill Ackman drew opposition from customers and U.S. government officials. Norfolk Southern rejected three offers, including one in December that valued the company at $27-billion (U.S.).
Whitecap Resources Inc. climbed 8.83 per cent to a three-month high, after the oil and natural gas explorer lowered its monthly dividend and doubled its 2016 capital spending guidance to $148-million.
Valeant slipped 7.82 per cent for a second day of losses. The drugmaker's board has asked outgoing Chief Executive Officer Michael Pearson to co-operate with a subpoena to appear before a U.S. Senate committee that's investigating drug pricing. The committee said Friday it intended to start contempt proceedings against Pearson, after he failed to appear at a deposition that week.
Shares of Valeant have rebounded from a five-year low after winning the support of lenders to waive a default and ease some restrictions on its loan terms last week. Valeant shares remain down almost 90 per cent from an August record.
Wall Street closed lower after a late sell-off on Monday with gains in materials and banks more than offset by declines in consumer staples shares as investors girded for the start of an earnings season expected to be gloomy.
The Dow Jones industrial average fell 20.55 points, or 0.12 per cent, to 17,556.41, the S&P 500 lost 5.61 points, or 0.27 per cent, to 2,041.99 and the Nasdaq Composite dropped 17.29 points, or 0.36 per cent, to 4,833.40.
"The market lacks enough conviction to move stocks in any one direction for any one amount of time long enough for investors to sink their teeth into and rack up performance," John Stoltzfus, the New York-based chief market strategist at Oppenheimer & Co., said. "There is an increased amount of skepticism and concern, mostly around earnings season. It boils down to a market that has to climb a wall of worry and has to earn its gains."
Alcoa Inc. unofficially kicks off the reporting season after the close. As investors await fresh cues from corporate America, analysts are projecting first-quarter profits will contract 10 percent - compared with calls for flat earnings growth at the start of the year - including a 20-per-cent drop for banks. Still, for the first time in eight months, the pace at which they are cutting their estimates is slowing.
While S&P 500 companies have historically exceeded earnings forecasts, sales have fallen short of projections in the past two periods. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. are all scheduled to release results this week.
Following a tumultuous start to the year in which the S&P 500 tumble as much as 11 pe rcent, U.S. equities are now almost unchanged on optimism that central bank support will be enough to support growth. Still, reasons for additional gains have grown thin, with valuations far above their five-year average and the seven-year bull market weeks away from becoming the second-longest in history.
After comments by Federal Reserve Chair Janet Yellen and minutes from the March meeting this month reaffirmed officials won't rush to raise interest rates, traders are pricing in zero chances of a raise in April. The first month with at least even odds for a boost has been pushed to February 2017.
Europe's FTSEuroFirst 300 index of leading shares ended up 0.3 per cent, helped by miners and a rally in Italian bank shares. European stocks have fallen for the last four weeks, and another down week would mark their worst run since mid-2013.
MSCI's gauge of shares across the globe rose 0.35 per cent and Nikkei futures edged up 0.1 per cent.
Oil rose to a four-month high in London ahead of a meeting in Doha this month where producers will discuss freezing output.
Brent futures rose 2.1 per cent. Venezuela said the first priority of the April 17 talks should be to cap output, while Azerbaijan said it backs a freeze. Crude and other commodities were also bolstered by the dollar's drop to a nine-month low. Prices dropped earlier after Iraq, OPEC's second-biggest producer, boosted output 2 per cent and exports by 18 per cent last month, the state-run Oil Marketing Co. said.
"There's a lot of excitement about the Sunday meeting," said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. "Speculation that an agreement will be reached is generating some buying. There should be considerable short covering before the meeting."
Oil has rebounded after falling to the lowest level in more than 12 years amid signs that a global glut will ease as U.S. output declines. Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, said it will agree to a freeze only if it's joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran's support.
Brent for June settlement advanced 89 cents to $42.83 a barrel on the London-based ICE Futures Europe exchange. It was the highest close since Dec. 4. The global benchmark closed at a $1.08 premium to West Texas Intermediate for June delivery.
WTI for May delivery rose 64 cents, or 1.6 per cent, to settle $40.36 a barrel on the New York Mercantile Exchange. It was the highest close since March 22. Futures rose 6.6 percent on Friday, the biggest increase since Feb. 12.
The Bloomberg Dollar index, which tracks the currency against major peers, dropped 0.5 per cent to the lowest since June. The Bloomberg Commodity Index climbed 0.3 per cent to the highest since March 29.
U.S. crude production slid for the 10th time in 11 weeks through April 1, while stockpiles fell from the highest level in more than eight decades, according to the Energy Information Administration. The agency will report on last week's inventories and output on Wednesday.
"Investors are anxious to see if the EIA reports we had another crude draw," said Bob Yawger, director of the futures division at Mizuho Securities USA in New York.
Iraqi crude exports rose to 3.81 million barrels a day in March from 3.23 million the prior month, the state-run company, known as Somo, said in an e-mailed statement. Iraq supports the February agreement between Saudi Arabia, Russia, Venezuela and Qatar to cap output at January levels, Iraqi Oil Ministry Spokesman Asim Jihad said on March 23, without confirming if the country agrees to freeze its own production.
"This is going to be a very volatile, headline-driven market this week," Mr. Yawger said. "There will be many comments about the upcoming meeting and prices will move. If some sort of agreement looks likely come Sunday or Monday, we would get a rally at the start of next week."
With files from Reuters