Traders work on the floor of the New York Stock Exchange (NYSE) in New York on Friday, April 8.Michael Nagle/Bloomberg
Canadian stocks rose on Friday as a rally in crude prices boosted energy producers and a surge in employment suggested an anticipated interest-rate cut is off the table.
The Standard & Poor's/TSX Index rose 0.98 per cent, or 130.29 points, to 13,396.73 in Toronto. The benchmark pared its loss in the week to 0.3 per cent and brought its year-to-date gain to 2.9 per cent, the second-best among developed markets worldwide.
A report Friday showed Canadian employment rose faster than forecast in March, a big step in erasing the chance the Bank of Canada will cut rates in its April 13 interest-rate decision. Canadian companies joined global stocks in rallying with commodity prices to end a week that's seen markets whipsaw and currency volatility approach the highest since 2011.
Canada's largest energy producers led Friday's rally, adding 2.6 per cent to the highest level this month. Enerplus Corp. surged 6.4 per cent to the highest since December, while Whitecap Resources Inc. was up 7.5 per cent, extending a four-day rally in which it's gained more than 13 per cent.
Raw-materials producers rallied for a fourth straight day, rising 1.7 per cent, while shares of industrial and financial companies jumped at least 0.7 per cent..
Health-care companies slumped 2.6 per cent, dragged down by a decline of 6.1 per cent for Valeant Pharmaceuticals International Inc.
U.S. stocks edged higher, with the Standard & Poor's 500 Index trimming the worst weekly slide in two months, as a surge in crude that boosted energy shares offset a slump in biotechnology shares.
The S&P 500 climbed 0.2 per cent to 2,047.63 in New York, remaining in a range it's held since the Federal Reserve's last policy meeting on March 16. The index rose as much as 0.9 pe rcent Friday, and closed down 1.2 percent in the week, the most since Feb. 5. Equities have swung between gains and losses in the five days as investors search for clues on the strength of the American economy ahead of what is forecast to be the worst earnings season since the financial crisis.
"You still have a lot of uncertainty surrounding earnings," said Peter Jankovskis, who helps oversee $1.9-billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments. "There was definitely a risk off trade yesterday. People don't want to jump in and take a big position either way in front of an earnings number that people expect to be down."
The Dow Jones Industrial Average advanced 0.2 per cent to 17,577.23. The Nasdaq Composite Index was little changed after erasing gains, dragged lower by biotech shares. The group fell 1.1 per cent for a second day of losses following a 6-per-cent rally Wednesday.
Energy shares led gains in the S&P 500 Friday with a 2-per-cent advance, as Chevron Corp. surged 1.6 per cent. Gap Inc. shares fell 14 per cent after the struggling apparel chain posted disappointing sales.
Stocks have made little progress since snapping a five-week winning streak last month that erased losses from the worst-ever start to a year. The S&P 500 ended the week higher by 0.2 per cent in the year. It has remained within 1 per cent of the 2,050 level over the past three weeks, as sentiment lurched from optimism that central banks will support growth to worry that their efforts may not be enough to fend off a slowdown. The Chicago Board Options Exchange Volatility Index capped its biggest weekly advance since January.
Oil rose the most in two months as U.S. crude production continued to slide before talks between suppliers to discuss freezing output.
Futures climbed 6.6 per cent in New York. U.S. output slid for the 10th time in 11 weeks through April 1 and crude stockpiles fell, according to data from the Energy Information Administration on Wednesday. The number of active oil rigs in the U.S. dropped to the lowest level since 2009 this week, Baker Hughes Inc. data show. Major producers from Saudi Arabia to Russia will meet in Doha on April 17 to discuss freezing output in a bid to stabilize prices.
"There's a lot of nervousness about the April 17 meeting and what it will mean for the market," said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. "We're still hemmed in a range below $40. Breaking through would be very bullish for the market."
Crude slid to the lowest level in almost 13 years in February before rebounding on signs a global glut will ease. Prices have whipsawed this week amid speculation over whether an accord to cap output can be reached. Saudi Arabia said it will only agree to a freeze if it's joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran's support.
West Texas Intermediate for May delivery advanced $2.46 to close at $39.72 a barrel at on the New York Mercantile Exchange. It's the biggest gain since Feb. 12. Prices climbed 8 per cent this week.
Brent for June settlement rose $2.51, or 6.4 per cent, to $41.94 a barrel on the London-based ICE Futures Europe exchange. The front-month contract closed at an 8-cent discount to the second-month. The global benchmark oil closed at a 95-cent premium to June WTI.
The Bloomberg Dollar Spot Index fell to the lowest since June, bolstering investor demand for commodities priced in the currency. The Bloomberg Commodity Index, a gauge of 22 raw materials, increased 2 per cent.
The Standard & Poor's 500 Oil & Gas Exploration and Production Index climbed to the highest level since December. The 10 biggest gainers on the S&P 500 were commodity companies.
"Prices just flop back and forth," said Kyle Cooper, director of research with IAF Advisors and Cypress Energy Capital Management in Houston. "The market is extremely psychotic, subject to sharp reversals on inconsequential information."
Russia is seeking a successful result from the Doha meeting, Energy Minister Alexander Novak told reporters in Moscow Friday, adding that countries are discussing a freeze of oil production at January levels. Russian oil and condensate production will rise through 2017, even as the nation prepares for the talks, according to Goldman Sachs Group Inc.
Global oil producers won't discuss output cuts at the Doha meeting, Ecuadorean Oil Minister Carlos Pareja said at a meeting of Latin American ministers in Quito, Ecuador.
"I'm not buying this rally," said Stewart Glickman, an equity analyst at S&P Capital IQ in New York. "We went from $26 to $41 on optimism that something will happen to curb supply. The risks of a sharp downturn remain greater than those for a rally."
Recent moves signal Iran is seeking to win market share, not curb output. State-run National Iranian Oil Co. will sell the Forozan Blend oil for May to Asia below the level offered by rival Saudi Aramco for Arab Medium, the third month the grade is being offered at a discount after being at a premium for almost seven years through February, data compiled by Bloomberg show.
"The news doesn't justify this move," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass. "We should be moving lower on the Iranian comments. Hope about the U.S. economy and the drop in shale production must be giving the market support."