Canada’s main stock edged higher on Friday, led by consumer-related stocks, while U.S. approval of the Keystone XL pipeline gave TransCanada Corp. a boost before some gains were pared.
The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed up 9.06 points, or 0.06 per cent, at 15,442.67.
TransCanada rose 6 cents, or 0.10 per cent, to $61.82 after U.S. President Donald Trump gave the company its long-awaited presidential permit for the 1,897-kilometre Keystone XL pipeline, but analysts still aren’t counting on it getting built.
The Calgary-based company faces a long list of permits and approvals before it can start construction, especially in Nebraska where TransCanada doesn’t expect a state commission to rule on the project until the end of the year.
A dramatic session on Wall Street ended little changed on Friday as stocks pared losses after Republicans pulled their bill to overhaul the U.S. healthcare system.
The Dow Jones Industrial Average fell 58.62 points, or 0.28 per cent, to 20,597.96, the S&P 500 lost 1.88 points, or 0.08 per cent, to 2,344.08 and the Nasdaq Composite added 11.05 points, or 0.19 per cent, to 5,828.74.
The benchmark S&P 500 shot up briefly into positive territory before falling back into the red as Republicans pulled the legislation due to a shortage of votes just before the markets closed, leaving investors to assess how the healthcare bill’s failure would affect Mr. Trump’s broader economic agenda.
Investors had worried earlier this week that the failure of the bill, which would have dismantled the law known as Obamacare, would prove an ominous sign for Mr. Trump’s ability to push through his economic agenda, including tax reform.
But some analysts and investors have seen a failure of the bill as a catalyst to bring forward action on tax reform in particular.
The back-and-forth over the bill this week has led to some of the most volatile trading Wall Street has seen since Mr. Trump’s election in November. For the week, the S&P 500 fell 1.4 per cent, its worst weekly decline of the year.
“This is now an indication that the president’s agenda is probably going to be more ambitious than Congress can manage,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York. “It is probably going to mean that equity markets are going to have to factor in a degree of dysfunction that investors were hoping they wouldn’t have to.”
The S&P 500 has climbed 9.6 per cent since Mr. Trump’s election, notching a series of record highs along the way. But the rally has stalled recently, and Tuesday’s 1.2-per-cent drop set off concerns about the beginning of a larger fall.
“The economy and earnings were doing better since before the election,” said Paul Zemsky, chief investment officer for multi-asset strategies and solutions at Voya Investment Management in New York. “If people want to drop the S&P by 300 points because this doesn’t pass, I and others will be down there to buy it.”
Health stocks surged late in the trading session Friday after Republicans pulled their bill.
Hospitals led the advance, with the BI North America Hospitals Competitive Peer Group Index up 5.4 per cent at the close in New York. Centene Corp., an insurer that focuses on Medicaid plans, rose 5.2 per cent to $68.73. Hospitals and insurers like Centene would have been hurt by the GOP bill, which would cut millions of people from health insurance and roll back an expansion of the Medicaid program for the poor.
Sheryl Skolnick, an analyst with Mizuho Securities who tracks hospital industry stocks, cheered the Republican loss.
“This was bad legislation, with very damaging potential impact on hospitals, patients and doctors, and would have done little to restore competitive markets or rational pricing,” Ms. Skolnick said.
Overall, the S&P 500 fell 1.4 per cent in the five days, its worst week since Nov. 4.
Banks led losses in the week with a 3.8-per-cent rout that was the biggest since January 2016. Health-care shares slid 1.3 per cent in the week.
The Stoxx Europe 600 Index fell 0.2 per cent to cap a 0.5-per-cent drop in the year.
Japan’s Topix trimmed some losses for a week that included the biggest one-day drop since Mr. Trump’s election. The index finished with a 1.4-per-cent decline for the week. The MSCI Asia Pacific fared better, with a 0.1-per-cent decrease.
Oil rose modestly on Friday in a spate of late-day activity, but fell on the week as concerns persisted over an excess of crude.
U.S. West Texas Intermediate (WTI) crude futures settled up 27 cents to $47.97 a barrel, but lost 0.5 per cent on the week. About 390,000 WTI contracts had changed hands, lower than the average of about 520,000 over the last 200 days.
Brent crude ended up 24 cents to $50.80, and ended down 1.8 per cent this week.
Oil has been on the back foot for more than two weeks now, after a string of U.S. inventory reports suggested that output cuts by the Organization of the Petroleum Exporting Countries were not having the desired effect in reducing global oversupply.
On Thursday, a Saudi energy ministry official told Reuters that crude exports to the United States in March would fall by around 300,000 barrels per day (bpd) from February and hold at those levels for the next few months.
The official said the expected drop, in line with OPEC’s agreement, could help draw down U.S. inventories that stood at a record 533 million barrels last week - stocks that have in part remained buoyant because of reduced seasonal refining runs.
“We still are at record high inventories here in the U.S.,” said Andrew Lipow, president of Lipow Oil Associates in Houston. “We’re seeing some short-covering given the recent declines in the price.”
Saudi exports to other regions, notably Asia, remained elevated despite the OPEC-led deal that includes other producers like Russia to cut output by 1.8 million bpd during the first half of the year.
Unless OPEC extends the curbs beyond June or makes bigger cuts, traders say oil prices are at risk of falling further.
“OPEC’s goal of drawing down inventories to normal levels is not going to be reached before their agreement expires on June 30,” said U.S. investment bank Jefferies in a note to clients.
Many are now watching for whether OPEC, whose committee monitoring the cuts will meet over the weekend in Kuwait, will extend the deal.
In Russia, private oil producers are ditching their skepticism and lining up behind an extension of output cuts after previous oil price increases compensated for lost income.
In the United States, shale drilling has pushed up oil production by more than 8 per cent since mid-2016 to just above 9.1 million bpd, though producers have left a record number of wells unfinished in Permian, the largest oilfield in the country, a sign that output may not rise as swiftly as drilling activity would indicate.
The latest U.S. drilling rig count showed an increase of 14 rigs, the tenth straight weekly rise, according to Baker Hughes data.
With files from Bloomberg NewsReport Typo/Error
- TransCanada Corp$63.38+0.08(+0.13%)
- Crude Oil Front Month Futures$49.19+0.22(+0.45%)
- Gold Front Month Futures$1,267.20+3.50(+0.28%)
- S&P/TSX Composite15,586.13+79.66(+0.51%)
- Dow Jones Industrials20,940.51-40.82(-0.19%)
- NASDAQ NMS COMPOSITE INDEX6,047.61-1.33(-0.02%)
- S&P 500 INDEX2,384.20-4.57(-0.19%)
- Updated April 28 4:20 PM EDT. Delayed by at least 15 minutes.