Canada’s main stock index rose on Wednesday after a slew of upbeat earnings reports from those including e-commerce company Shopify Inc and pipeline operator Enbridge Inc.
Technology sector rose 3.3% boosted by Shopify Inc, which jumped 7.1%, after posting quarterly revenue and profit above estimates.
Enbridge gained 3.1% after reporting quarterly profit higher than analysts’ expectations.
The Toronto Stock Exchange’s S&P/TSX composite index was up 173.34 points, or 1.08%, at 16,294.66.
Among the largest percentage gainer on the TSX was Element Fleet Management Corp, which jumped 12%, after the company reported quarterly results.
Celestica Inc. rose 11.4% after the chipmaker posted second-quarter revenue above analysts’ expectations.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.3%.
After a pause, gold prices resumed their climb and added 0.9% to $1,975.97 an ounce.
Energy stocks rose 2.1%, while the financial and industrial sectors increased 0.8% and 1.6%.
The Canadian dollar rose against its U.S. counterpart on Wednesday as the Federal Reserve’s dovish stance weighed broadly on the greenback and the Ontario government paved the way for most businesses in Canada’s most populous city to reopen.
The U.S. dollar fell to a two-year low as the Fed repeated a pledge to use its “full range of tools” to support the economy for as long as it takes to recover from fallout of the COVID-19 pandemic.
“The market’s immediate response to a downbeat and cautious Federal Reserve policy announcement was to continue selling U.S. dollars versus major currencies,” said Michael Goshko, corporate risk manager at Western Union Business Solutions.
Higher prices for oil, one of Canada’s major exports, added to support for the loonie. U.S. crude oil futures settled up 0.6% at $41.27 a barrel after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check.
The Canadian dollar was trading 0.2% higher at 1.3344 to the U.S. dollar, or 74.94 U.S. cents. The currency, which on Tuesday touched its strongest intraday level in nearly seven weeks at 1.3327, traded in a range of 1.3333 to 1.3387.
U.S. stocks added to gains on Wednesday after the Federal Reserve repeated a pledge to use its “full range of tools” to support the economy but cautioned that the outlook “will depend significantly on the course of the virus.”
At the end of its two-day policy meeting the Fed said it will keep its interest rate target range until it is confident the economy has weathered the coronavirus pandemic and is on track for maximum employment and price stability goals.
While strategists said they found no surprising decisions after the meeting, many pointed out that the Fed’s focus on the virus highlighted the uncertainties it is facing.
“The Fed is putting health again front and center in its statement, which is impactful and meaningful, especially when we’re waiting on a bipartisan agreement on the fifth round of the CARES Act. It’s a bit ominous, to be frank,” said Nela Richardson, investment strategist at St. Louis-based Edward Jones.
But Richardson noted the “commitment to do whatever it takes to get the economy going again” and a recognition the economy has improved and “come up from the bottom.”
And with Fed confirmation of an extraordinarily uncertain path, “investors can feel certain that monetary stimulus is going to remain accommodative for the foreseeable future,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management.
Unofficially, the Dow Jones Industrial Average rose 162.69 points, or 0.62%, to 26,541.97, the S&P 500 gained 40.16 points, or 1.25%, to 3,258.6 and the Nasdaq Composite added 140.85 points, or 1.35%, to 10,542.94.
Wall Street’s major indexes were already higher before the Fed commentary as investors anticipated earnings reports due on Thursday from Amazon.com Inc, Facebook Inc, Apple Inc and Alphabet’s Google.
These companies were among the biggest boosts for Nasdaq even as the chief executives of all four companies also faced jabs from lawmakers at a congressional hearing on antitrust issues.
“You’ll often see an uptick in those shares ahead of earnings and if they disappoint then they tend to sell off,” said Citi’s Snyder.
Investors were also focused on contentious negotiations in Washington around what should go into government’s next coronavirus relief plan.
Advanced Micro Devices Inc shares rose after the chipmaker raised its full-year revenue forecast and boosted the Philadelphia chip index.
Starbucks Corp climbed after the coffee chain said business was “steadily recovering” worldwide and it would report a profit in the current quarter.
Of the S&P 500 firms that have reported results, 79.1% have surpassed a low bar of quarterly profit expectations, according to Refinitiv IBES data.
Recent data pointed to a possible slowdown in business and hiring as several U.S. states reimposed restrictions after a spike in COVID-19 infections, while deaths in the country caused by the disease surpassed 150,000 on Wednesday.
Boeing Co shares slipped after it slashed production on its widebody programs and reported a bigger-than-expected loss due to the fallout from the pandemic.
Reuters.
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