Traders work on the floor of the New York Stock Exchange (NYSE) April 15.Brendan McDermid/Reuters
Canadian stocks rose slightly on Tuesday for the first increase in four days as energy producers advanced with crude oil, and investors weighed results from Teck Resources Ltd. and Husky Energy Inc.
The benchmark Standard & Poor's/TSX Composite Index rose 0.1 per cent, or 13.45 points, to 13,809.44 in Toronto, on the way to snapping the longest losing streak in three weeks after fluctuating in morning trading. The gauge is one of the best-performing developed markets in the world this year with a 6.1-per-cent gain.
Teck Resources added 4.2 per cent after reporting a surprise first-quarter adjusted profit to lead raw-materials producers higher as five of 10 industries increased. Industrial stocks sank 1.1 per cent to offset some gains, led by a 5.1-per-cent decline in Canadian National Railway Co.
Canadian National slid to the lowest since March 4 after the country's largest railroad operator cut its full-year profit target for the first time in eight years amid weaker-than-expected demand for commodities including coal and crude. Adjusted earnings for 2016 will be in line with 2015's $4.44 a share, down from earlier forecasts of a mid to single-digit increase for the year, the Montreal-based company said in a statement Monday.
Crescent Point Energy Corp. and TransCanada Corp. rose at least 0.3 per cent as energy stocks advanced 0.85 per cent. Oil closed at the highest level in more than five months in New York amid signs that a global surplus is gradually diminishing.
The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, with a 17-per-cent rally in the benchmark equity gauge from a Jan. 20 low aligning with a rebound in crude from the lowest levels since 2003. Raw-materials and energy producers are the two top-performing industries in Canada so far this year, up more than 14 per cent.
The Canadian benchmark now trades at 22 times earnings, about 15 per cent higher than the 19.2 times earnings valuation of the Standard & Poor's 500 Index, according to data compiled by Bloomberg.
Bombardier Inc. rallied 10.6 per cent, headed for the highest close since July, after the aircraft manufacturer signed a firm order with Chorus Aviation Inc. valued at $229-million for five aircraft with an option for five more.
Husky Energy sank 9.2 per cent, the most since January, after the energy company raised $1.7-billion in relief for some of its Canadian pipelines from Li Ka-Shing, Hong Kong's richest man, who controls the company. A couple of Mr. Li's other units bought 65 per cent of Husky's midstream operations, which will continue to be run by Husky. The energy producer also posted a $458-million loss in the first quarter, compared with a profit a year ago.
The S&P 500 edged higher on Tuesday, buoyed by gains in the energy and materials sectors as soft economic data weakened the dollar, giving support to oil and gold prices.
The Dow Jones industrial average rose 11.85 points, or 0.07 per cent, to 17,989.09, the S&P 500 gained 3.77 points, or 0.18 per cent, to 2,091.56 and the Nasdaq Composite slipped 7.48 points, or 0.15 per cent, to 4,888.31.
Markets see no chance of an interest rate increase at the meeting that is set to begin on Tuesday but have priced in a one-in-five chance of a hike at the meeting in June. Fed officials have repeatedly said a hike in June is on the cards.
While job growth continues to gain strength, inflation stubbornly remains below the Fed's 2 percent target.
"Investors are focused on the Fed's language and especially their statements of the global and economic developments and to what degree those items pose risks," said Bill Merz, investment strategist at U.S. Bank.
Investors will also assess earnings reports from major players such as Apple, AT&T and Ebay, which are due to report after the market close.
First-quarter earnings from S&P 500 components are expected to have fallen 7.3 percent from a year earlier, according to Thomson Reuters I/B/E/S. Of the 135 companies that have reported, 59 percent reported revenue above analyst expectations, just short of the average 60 percent since 2002.
"Expectations are low and while companies are modestly beating them, the returns over the past couple of months have been due to multiple expansions and not fundamental growth and current prices are slightly high," said Mr. Merz.
With the S&P 500 up in eight of the past 10 weeks and nearing the record high set almost a year ago, traders are struggling to find reasons to push it even higher as underwhelming earnings and the specter of higher interest rates hover over markets.
Oil futures rose 3.3 per cent. BP Plc Chief Executive Officer Bob Dudley, who in February joked that swimming pools might be needed to hold the global oil surplus, said Tuesday markets may re-balance by year-end. U.S. crude supplies probably expanded by 1.75 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.
"Market sentiment continues to improve," said Tim Evans, an energy analyst at Citi Futures Perspective in New York. "A lot of people are convinced that the bottom has been reached, and the market will rebalance later this year."
Crude has rebounded after slumping to the lowest since 2003 in February amid signs the global surplus will ease as U.S. output declines. Exxon Mobil Corp. was demoted from the top credit rating by Standard & Poor's for the first time since the Great Depression as the collapse in prices strangled cash flows. The rating was lowered from AAA to AA+, S&P said in a statement on Tuesday.
West Texas Intermediate for June delivery rose $1.40 to settle at $44.04 a barrel on the New York Mercantile Exchange. It was the highest close since Nov. 10.
Brent for June settlement increased $1.26, or 2.8 per cent, to $45.74 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $1.70 premium to WTI.
"Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year," BP's Dudley said in the company's first-quarter earnings statement.
With files from Reuters