Canada’s main stock index climbed to a record high on Friday, bolstered by a jump in the shares of e-commerce giant Shopify Inc and gains for the heavily weighted financial services group.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 186.55 points, or 0.9%, at 21,768.53.
“Shopify is on fire today,” said Lorne Steinberg, president of Lorne Steinberg Wealth Management Inc. “That is a major reason for the market move.”
Shares of Shopify, the most valuable company on the TSX by far, rose 11.6%, adding to gains since the company announced earnings last month.
The technology sector advanced 4%, while financials, which account for 30% of the Toronto market’s value, ended 0.4% higher. The sector could benefit from a decision last week by Canada’s financial regulator to allow banks and insurers to resume dividend increases and share buybacks.
“We still see a lot of value in Canadian financials,” Steinberg said.
Healthcare jumped 4.8%, led by gains for cannabis shares.
“There’s some optimism that the U.S. is going to pass the marijuana legalization bill and that will open up to more investment opportunities,” said Gregory Taylor, portfolio manager at Purpose Investments.
For the week, the Toronto market was up 1.5%. It has advanced 24.9% since the beginning of the year, slightly eclipsing the S&P 500.
Energy has been a major driver of the TSX in recent months. But the sector fell 0.6% on Friday, weighed by a drop in oil prices.
U.S. crude oil futures settled nearly 1% lower at $80.79 a barrel on worries that the U.S. Federal Reserve will accelerate plans to boost interest rates to tame inflation.
Wall Street stocks closed higher as well, with market-leading growth shares kick-starting indexes’ climb as investors looked past disappointing U.S. economic data.
But despite their advances, all three major U.S. stock indexes ended the session below last Friday’s close, ending a five-week streak of weekly gains.
Investors favoured growth over value, with megacap tech stocks, led by Apple Inc and Microsoft Corp, doing the heavy lifting.
The University of Michigan’s preliminary consumer sentiment data for November unexpectedly dropped to a 10-year low, and a Labor Department report showed job openings barely budged from record highs even as workers are quitting in record numbers.
“Markets drifted higher today despite a very weak consumer sentiment report, as inflation seems to be hurting consumers more than corporate profits,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
The souring mood of the consumer could be worrisome to retailers as the holiday shopping season draws near, and is likely to draw intensified scrutiny to upcoming retail earnings reports.
Walmart Inc, Target Corp, Home Depot Inc and Macy’s Inc are among the high profile retailers expected to report next week.
“Investors will be focused on guidance from retailers to determine if inflation will crimp profit margins or if costs can be passed through,” Carter added.
Retail results will herald the last days of what was a largely upbeat third-quarter earnings season. As of Friday, 459 of the companies in the S&P 500 have reported. Of those, 80% delivered consensus-beating earnings, according to Refinitiv.
The Dow Jones Industrial Average rose 179.08 points, or 0.5%, to 36,100.31. The S&P 500 gained 33.58 points, or 0.72%, at 4,682.85 and the Nasdaq Composite added 156.68 points, or 1%, at 15,860.96.
Ten of the 11 major sectors of the S&P 500 ended higher, with communications services’ 1.7% advance leading gainers. Energy’s 0.3% dip represented the largest percentage loss.
Shares of Johnson & Johnson gained 1.2% after the healthcare giant announced splitting into two companies, dividing its consumer health care segments from its pharmaceuticals/medical devices business.
Tesla Inc dropped 2.8% on news that Chief Executive Elon Musk has sold an additional $700 million in stock in the next chapter of a saga that began with Musk’s infamous Twitter poll on whether he should offload shares in the company he founded.
Rival electric automaker Rivian Automotive Inc advanced 5.7%, notching its third consecutive gain in as many days as a publicly traded company.
U.S.-listed shares of Alibaba Group Holding slipped 0.6% following the e-commerce giant’s report showing its slowest-ever Singles Day sales.
Advancing issues outnumbered decliners on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored advancers. The S&P 500 posted 34 new 52-week highs and one new low; the Nasdaq Composite recorded 130 new highs and 96 new lows. Volume on U.S. exchanges was 10.32 billion shares, compared with the 10.94 billion average over the last 20 trading days.
Read more: Stocks that saw action on Friday - and why
Reuters
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