With crude oil hitting yet another (yawn!) record high on Thursday, it is worth pointing out that the commodity has been awfully good for Canada's energy-heavy benchmark index.
The S&P/TSX composite index closed at 14,607.99, up 236.46 points or 1.7 per cent – meaning that it has now risen more than 20 per cent since it bottomed out in a wild selloff in January. You can thank two factors for the rebound: potash and oil.
Crude oil has risen more than 40 per cent over this period, leading to a 36 per cent rally in the energy sub-index (oil hit a new high of $124.61 (U.S.) a barrel on Thursday, up about a buck). Potash Corp. of Saskatchewan Inc. has risen 69 per cent, helping lift the materials sub-index 25 per cent higher.
As for gold, which is a big part of the materials sub-index, the commodity hasn't had a big impact. In fact, since the index's low on Jan. 21, gold has gone nowhere – rising spectacularly to a record of $1,002 an ounce before settling back to where it began. Gold stocks, as represented by Barrick Gold Corp., have fallen about 12 per cent.
The Dow Jones industrial average closed at 12,866.78, up 52.43 points or 0.4 per cent on Thursday. Alcoa Inc. rose 4.1 per cent and Chevron Corp. rose 2.3 per cent. On the downside, financials were hit hard: American International Group Inc. fell 2.1 per cent and Bank of America Corp. fell 1.8 per cent. The broader S&P 500 closed at 1397.68, up 5.11 points or 0.4 per cent.
