Trader Benedict Willis, left, works on the floor of the New York Stock Exchange, Wednesday, April 6.Richard Drew/The Associated Press
Canadian stocks rose on Wednesday after four days of declines, despite persisting concerns that the pace of global growth will remain sluggish.
The Standard & Poor's/TSX Composite Index increased 0.32 per cent to 13,347.46 in Toronto. While the Canadian benchmark equity gauge had lost 1.9 per cent in the previous four trading sessions, it's still up 2.5 per cent this year and remains one of the best-performing developed markets in the world.
Downside risks to global markets have increased, ranging from terrorism to the U.K.'s potential departure from the European Union, at a time when growth is at best mediocre, International Monetary Fund Managing Director Christine Lagarde said Tuesday in an interview with Bloomberg TV. "We don't see much by way of upside," she said.
On Wednesday, oil climbed after U.S. crude inventories unexpectedly dropped from the highest level in more than eight decades.
In Toronto, energy stocks finished up 3 per cent.
Raw-material producers in the S&P/TSX lost 0.1 per cent as gold fell and the price of copper slipped for a seventh day. Financial firms in the benchmark index decreased 0.5 per cent, led lower by losses in Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce.
S&P/TSX health-care stocks added 4.1 per cent, spurred by a 18.5-per-cent increase for Valeant Pharmaceuticals International Inc. The drugmaker has rebounded from a five-year low, increasing 29 per cent over the last two days, after it said a special "ad hoc" board
U.S. stocks advanced, with the Standard & Poor's 500 Index posting its best gain in more than three weeks, as health-care shares rallied on deal speculation and energy producers rallied with crude oil.
The main benchmark index halted a two-day slide as Pfizer Inc.'s busted deal with Allergan Plc sparked speculation the two companies will now turn their attention to other potential merger targets, sending biotechnology companies to their strongest rally in more than four years. An unexpected drop in crude stockpiles drove crude and energy producers to their biggest gains in three weeks.
Equities held gains after minutes from the Federal Reserve's last meeting showed policy makers were worried that slowing world growth could reduce corporate investment plans and restrain U.S. exports.
Pfizer capped its biggest rally in four years after agreeing to end its $160 billion merger with Allergan, which added 3.4 per cent after its biggest drop since 2004. The Nasdaq Biotechnology Index surged 6 per cent, the most since 2011.
The Dow Jones industrial average rose 113.07 points, or 0.64 per cent, to 17,716.39, the S&P 500 gained 21.53 points, or 1.05 per cent, to 2,066.7 and the Nasdaq Composite added 76.78 points, or 1.59 per cent, to 4,920.72
The S&P 500's rebound from a nearly two-year low in February had shown signs of waning in tepid trading volume as investors consider whether efforts by central banks are potent enough to fend off slowing growth. The index's drop Tuesday ended a streak of 15 days without a 1 per cent daily move, the longest such period of relative calm in more than a year.
"Steady as she goes improvement in the economy, particularly as it relates to the Fed's mandate, is about the best environment to hope for," said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. "My takeaway from the Fed minutes is no surprises at all. If we were to see a reversal in some of this pullback by the dollar and or oil prices started to go down again, which would affect credit spreads, then I think the stock market would have trouble."
Oil futures rose the most in three weeks in New York. Crude supplies fell 4.94 million barrels last week, Energy Information Administration data show. A 2.85 million barrel gain was projected in a Bloomberg survey of analysts. Refineries processed the most crude in three months as output and imports slipped. Diesel led gains after the report showed stockpiles of distillate fuel, which includes diesel and heating oil, tumbled on the East Coast.
"This is a welcome number," said Scott Roberts, portfolio manager and co-head of high yield who manages $2.7-billion at Invesco Advisers Inc. in Atlanta. "It's always good to see a crude draw in April."
Prices also advanced after Kuwait said a deal to freeze output can be reached without Iran. Major producers have no option but to reach an agreement to cap production when they meet April 17 in Doha and this may set a price floor, Nawal al-Fezaia, Kuwait's governor to the Organization of Petroleum Exporting Countries, said Tuesday. Oil has swung between gains and losses since Friday amid speculation about whether an agreement can be reached at the meeting.
West Texas Intermediate for May delivery increased $1.86, or 5.2 per cent, to settle at $37.75 a barrel on the New York Mercantile Exchange. The contract rose 0.5 per cent Tuesday after falling 6.9 per cent the previous two sessions. Total volume traded was 30 percent higher than the 100-day average.
Brent for June settlement climbed $1.97, or 5.2 per cent, to $39.84 a barrel on the London-based ICE Futures Europe exchange. The front-month contract's discount to the second-month narrowed to 16 cents, the least since January, while the spread to the one-year contract slipped to the narrowest since July.
With files from Reuters