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Canada’s main stock index gained at Tuesday’s open with higher gold prices bolstering mining stocks. On Wall Street, key indexes pulled back somewhat from recent highs as investors await movement on a U.S. COVID-19 relief package.
At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 28.99 points, or 0.16 per cent, at 18,359.25.
In the U.S., the Dow Jones Industrial Average fell 25.9 points, or 0.08 per cent, at the open to 31359.88. The S&P 500 fell 5.1 points, or 0.13 per cent, at the open to 3910.49, while the Nasdaq Composite dropped 20.8 points, or 0.15 per cent, to 13966.815 at the opening bell.
“Some stimulus rally fatigue could be developing,” Axi chief market strategist Stephen Innes said in an early note.
“In terms of equities, the ‘three stanchions ' of the rally (stimulus, earnings, and vaccines) are still placing upward pressure on prices, with reflation areas of the market such as energy and resources continuing to outperform,” he said, noting a weaker U.S. dollar continues to push both crude and metals higher.
Bitcoin, meanwhile, extended gains on Tuesday, touching a record high in the wake of Tesla Inc.’s investment in the cryptocurrency.
Bitcoin climbed to a new peak of US$48,216 late in the Asian afternoon on Tuesday, according to figures from Reuters.
On the corporate side, Canadian earnings continue to roll in with results due Tuesday from pot producer Canopy Growth and energy giant Cenovus.
Ahead of the opening bell, Cenovus said it lost $153-million or 12 cents per share for the quarter ended Dec. 31 compared with a profit of $113-million or nine cents per share in the fourth quarter of 2019.
Toronto Stock Exchange operator TMX Group Ltd. reported fourth-quarter profit of $71.8-million, up from $47.5-milion in the same period a year earlier. On a per-share basis, TMX earned $1.26 per diluted share, up from 84 cents last year. Revenue totalled $219.5-million, up from $202.8-million. The results were released after Monday’s close.
On Wall Street, Twitter reports results after the close of trading.
Overseas, major European markets were flat to slightly lower in morning trading. The pan-European STOXX 600 slid 0.32 per cent. Germany’s DAX fell 0.56 per cent. Britain’s FTSE 100 slid 0.04 per cent and France’s CAC 40 was little changed.
In Asia, Japan’s Nikkei finished up 0.40 per cent. Hong Kong’s Hang Seng gained 0.53 per cent.
Crude prices continued their recent run, with Brent holding above US$60 a barrel, as recovery hopes underpin an expected rebound in demand.
The day range on Brent is US$60.71 to US$61.27. The range on West Texas Intermediate is US$57.98 to US$58.62. Both benchmarks hit their highest levels since January 2020 early in the session.
“That Brent crude and WTI have now run so far ahead of their respective support region in such a short amount of time is a warning sign,” OANDA senior analyst Jeffrey Halley said.
“The Relative Strength Indexes (RSI’s) on both have now climbed into very overbought territory. When it comes, the correction could well be quite brutal unless oil now contents itself to consolidate at these price levels for the next few days.”
Hopes that vaccines will be effective in the fight against COVID-19 and production cuts from Saudi Arabia have helped buoy crude prices in recent days.
Investors will now be awaiting this week’s figures on weekly U.S. crude inventories for direction. The American Petroleum Institute is expected to release its report later Tuesday. More official figures from the U.S. Energy Information Administration follow on Wednesday morning.
A Reuters poll on Monday suggested that analysts expect crude and gasoline stockpiles rose last week while distillate stocks likely fell.
In other commodities. gold prices rose to a near one-week high on Tuesday as the U.S. dollar faltered.
Spot gold rose 0.6 per cent to US$1,841.06 per ounce, after hitting its highest level since Feb. 3 of US$1,843.04 earlier in the session. U.S. gold futures gained 0.5 per cent at US$1,842.80.
“Gold is likely to be sought after on any dip for the next two sessions by Asian investors, looking to load up on risk hedging ahead of the Lunar New Year break,” Mr. Halley said.
“In the bigger picture, gold’s fate remains in the hands of events elsewhere in the U.S. dollar and U.S. bond market.”
The Canadian dollar edged higher in early going, supported by positive risk sentiment and higher crude prices, while its U.S. counterpart slipped against world currencies.
The day range on the loonie is 78.47 US cents to 78.66 US cents.
“This morning’s price action is the mirror image of yesterday’s, with USD weaker across the board as bond yields have pulled back from yesterday’s highs and better risk sentiment has dominated price action,” RBC chief current strategist Adam Cole said.
On world markets, the U.S. dollar index was 0.3 per cent lower at 90.73 in early London trading, having dipped to 90.603 for the first time since Feb. 1, according to figures from Reuters.
The euro rose 0.2 per cent to US$1.20775 on Tuesday, up from a two-month low of US$1.9520 touched Friday.
The British pound revisited its highs since May 2018, climbing to US$1.3784 in Asia. It last traded up 0.3 per cent at US$1.3774.
More company news
The Globe’s Nicolas Van Praet reports SNC-Lavalin Group Inc. is selling its oil and gas business and taking more financial charges on construction contracts as the Canadian engineering company pushes on with a strategic reinvention it hopes will provide stability after years of crisis. SNC has entered into a binding agreement to sell its resources oil and gas unit to Kentech Corporate Holdings Limited, the Montreal-based engineering firm said in a statement Tuesday. No firm purchase price was disclosed but SNC said it expects to book a gain on the sale when the transaction is finalized after taking a fair value writedown on the asset of between $260-million and $295-million.
Canopy Growth Corp’s aggressive cost-cutting measures and increased demand for cannabis products during the pandemic-led lockdowns helped the world’s largest pot producer report a smaller third-quarter adjusted loss on Tuesday. The company said it will turn profitable by the second half of its next fiscal year and achieve positive operating cash flow in fiscal 2023. The company posted an adjusted loss before interest, taxation, depreciation and amortization of $68.4-million for the three months ended Dec. 31, compared with $97-million, a year earlier. Canopy’s shares jumped more than 5 per cent in early trading in Toronto.
British private security firm G4S, which is a target of a bidding war, on Tuesday reported new and retained contracts worth 5.5 billion pounds (US$7.58-billion) and said its fourth-quarter performance was “strong.” The company, which has agreed to be bought by U.S. rival Allied Universal, also has an offer in hand from Canada’s GardaWorld. GardaWorld’s offer deadline ends on Wednesday, unless extended for the sixth time, while G4S shareholders have until Tuesday to accept Allied’s offer.
Japan’s No. 3 automaker Nissan Motor Co on Tuesday trimmed its loss forecast for the current financial year by more than a third as the automaker benefited from a rebound in demand led by China and cost cuts. The rebound in the world’s biggest auto market following a coronavirus-induced slump is helping Nissan and other global carmakers claw back sales. A shortage of semiconductors, however could dampen that recovery as it forces Nissan and its peers to curtail some output.
(10 a.m. ET) U.S. Job Openings & Labour Turnover Survey for December.
With Reuters and The Canadian Press