Trader Peter Tuchman works on the floor of the New York Stock Exchange, Tuesday, Jan. 19.Richard Drew/The Associated Press
Canadian stocks rose for only the third time this year on Tuesday after fluctuating throughout the trading session.
The TSX erased an early 156-point gain, falling into the red in the mid-afternoon before rising to finish up 0.5 per cent, or 60.07 points, to 12,002.24 in Toronto.
The rally erased a 1.1-per-cent slump Monday when the gauge fell to the lowest since June 2013. The index, which entered a bear market almost two weeks ago, has tumbled over 7 per cent year-to-date.
Canadian shares joined as worldwide equities pared an earlier rally as U.S. crude resumed its slump below $29 (U.S.) a barrel.
The nation's largest technology companies were among 8 of the 10 main sectors to rise on the day, gaining 1.4 per cent, while telecommunications shares also increased 1.4 per cent, led by gains of at least 1.4 per cent in Telus Corp. and Rogers Communications Inc. Materials producers fell for a fourth consecutive day, slipping 2.1 per cent to the lowest since June 2005 and down almost 9 per cent year to date.
Progressive Waste Solutions Ltd. jumped 10.53 per cent, headed for the most in seven years, toward a level last seen in April. U.S.-based Waste Connections Inc. agreed to buy Ontario-based Progressive Waste Tuesday, moving the tax domicile for its garbage-hauling business to Canada. Labrador Iron Ore Royalty Corp. gained 15.28 per cent, the most in two months, after an analyst at Canaccord Genuity raised the stock to "buy" from "hold."
Yamana Gold Inc. fell 8.11 per cent, its fourth consecutive day of declines after Macquarie Research downgraded the stock to "neutral" from the equivalent of "buy." Iamgold Corp. fell 12.95 per cent to the lowest since September after the mining company cut its guidance.
The Standard & Poor's 500 Index closed little changed as consumer shares led an advance, offsetting fresh signs of weakness in crude oil and corporate earnings after economic data in China helped ease some investor concern over a hard landing there.
The Standard & Poor's 500 Index gained less than 0.1 per cent to 1,881.35 in New York, after a whipsaw session that saw the gauge rise as much as 1.1 per cent and fall 0.8 per cent.
"I don't think we've resolved all the issues in the market," said Nick Sargen, who helps manage $46.2 billion as chief economist and senior investment adviser for Fort Washington Investment Advisors Inc. "The questions left are how much is China's economy in fact slowing down, and when will we see a floor for the price of oil."
In contrast to U.S. shares, European and Asian stocks rose amid speculation of further Chinese state aid after a report showed gross domestic product in the world's second-largest economy expanded 6.9 per cent in 2015, just shy of the government's 7-per-cent target, and the least since 1990.
Crude continued to fall Tuesday, with West Texas Intermediate futures losing 3.3 per cent. The International Energy Agency trimmed its 2016 estimates for global oil demand amid weakness in China. Markets could "drown in oversupply," sending prices even lower as demand growth slows and Iran revives exports with the end of sanctions, according to the agency.
The S&P 500's renewed selling sent the gauge toward a technical signal that indicates it's oversold. Its relative strength index, which measures whether gains or losses have been too fast to sustain, fell to 30, a threshold indicating a rebound may materialize.
The last time the RSI slipped below that level was on Jan. 13, the day before a 1.7-per-cent rally. The time prior to that was on Aug. 25, when the S&P 500 hit a bottom and rallied 6.5 per cent over the next three days.
The S&P 500 trades at 15.2 times the forecast earnings of its members, in line with the index's average of the past four years. It's more expensive than developed markets in Europe, where the Stoxx 600 Index trades for 14.1 times estimated earnings.
The equity benchmark is down almost 12 percent from its record set last May, and has slumped 9.1 per cent since the Federal Reserve raised interest rates last month for the first time since 2006. Meanwhile, a measure of volatility has jumped the most since a selloff in August which sent the S&P 500 into its first correction in four years.
While investors fret over the impact China's slowdown will have on global growth, the International Monetary Fund cut its world growth outlook as the commodities slump and political gridlock push Brazil deeper into recession, plunging oil prices hobble Mideast crude producers and the rising dollar curbs U.S. prospects.
The fund also said risks to the global outlook remain tilted to the downside, with the world facing three big adjustments: the emerging-market slowdown, China's shift to growth driven less by exports and manufacturing and the Fed's gradual exit from ultra-low interest rates.
The MSCI Emerging Markets Index rose for the first time in four days, gaining 1.7 per cent, the most in three months. Benchmarks in Russia and the Middle East climbed more than 2 per cent.
"The slowdown in China is nowhere near as bad as markets feared, plus officials have the ability to intervene and stimulate growth," said Justin Urquhart Stewart, London-based co-founder of Seven Investment Management, which oversees about $13-billion of assets. "It looks like the hangover from this awful start to the year is finally clearing."
The Shanghai Composite Index jumped 3.2 per cent, the most since November, with Reorient Financial Markets Ltd. saying government-led funds may have entered to bolster the market. The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong jumped 3 per cent, rebounding from a 2011 low.
Brent crude futures closed a touch higher, while the U.S. futures contract slid; their prices settled 30 cents apart. The U.S. contract did not settle on Monday, a U.S. holiday.
Brent crude futures rose 0.74 per cent to settle at $28.76 a barrel. U.S. crude futures fell 3.26 per cent to settle at $28.46. Earlier they had touched an intra-day high of $30.21.
Investor risk appetite initially improved on the expectation of further stimulus in China and rising prices for Brent, the global benchmark. Chinese oil demand likely hit a record in 2015, helping bolster the global oil benchmark.
With files from Reuters