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Canada’s benchmark stock index rose on Friday, recouping some of this week’s decline, as rising optimism that a major downturn in the economy could be avoided bolstered resource and financial shares. But Wall Street closed lower, as investors braced for more possible downside surprises a day after disappointing earnings from Apple.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 115.3 points, or 0.6%, at 20,236.04, after it posted its lowest closing level in three weeks the previous day.

For the week, the index was down 1.4%, as a jump in bond yields weighed on interest-rate sensitive sectors such as technology.

“We’ve got a bit of a rotation taking hold,” said Greg Taylor, a portfolio manager at Purpose Investments. “As much as the softening in tech has taken down the broader market I think energy and materials are doing well and that’s setting up the TSX maybe a little better for the second half (of the year).”

A mixed U.S. jobs report did not change growing perceptions among economists that the Federal Reserve could engineer a “soft landing” for the economy.

“I think people are getting more (secure) in the narrative that we’ve got a soft landing more than a recession coming up and with that the commodities are doing a little better,” Taylor said.

The TSX materials group, which includes precious and base metals miners and fertilizer companies, added 1.2%, while energy was up nearly 1% as U.S. crude oil futures settled 1.6% higher at $82.82 a barrel.

Heavily weighted financials climbed 0.9%. In contrast, technology was down 0.9%, its fourth straight day of declines, weighed by a decline of 8.9% for the shares of Open Text Corp after the company reported quarterly results.

Magna International Inc raised its full-year profit and sales outlook after its quarterly results beat estimates. Still, its shares gave up their initial gains to end 3.3% lower.

In the U.S., Apple’s shares fell 4.8%, its biggest daily percentage decline since Sept. 29, 2022 that dented the S&P 500 by about 16 points the day after the iPhone maker forecast a continued slide in sales.

A partial counterweight to Apple for the S&P 500 and Nasdaq was Amazon.com. Its shares rose 8.3% the day after the online retailer issued an upbeat third-quarter outlook. Amazon’s rise were an 11-point positive for the S&P 500.

“Those big bellwether companies really have the potential to cause investor jitters even though overall the trajectory and direction of both the economy and corporate earnings seems to be positive moving into August.” Said Greg Bassuk, chief executive officer of AXS Investments in New York.

The trading session was choppy, with the U.S. indexes rising in the morning, then wavering before turning negative.

“There’s still a lot of uncertainty around geopolitical concerns, Ukraine war, (and) China issues”, said Bassuk. He said Friday’s decline was “more about investors resetting and positioning for potential downside surprises.”

The Labor Department reported that U.S. employers added 187,000 jobs in July. Data for June additions was revised lower to 185,000 jobs, from 209,000 reported previously.

Average hourly earnings rose 0.4% in July, unchanged from the previous month, exceeding expectations, taking the year-on-year increase in wages to 4.4%.

The yield on the 10-year benchmark U.S. Treasury note dipped after the jobs data, partly boosting some megacap stocks.

Shares of other big tech companies, Microsoft and Snowflake rose 0.3% and 3.5% respectively after Amazon’s cloud business segment beat sales estimates.

Bond yields were lower in Canada as well, with the five-year government yield down 13 basis points to 3.9% by late afternoon after a week of upward pressure.

The Canadian economy unexpectedly lost 6,400 jobs in July while the jobless rate ticked up to 5.5%, providing more confidence to both money markets and economists that the Bank of Canada may be done with hiking interest rates during this economic cycle.

Implied interest rate probabilities based on trading in swaps markets now show about a 45% chance the Bank of Canada will hike interest rates one more time by the end of this year, according to Refinitiv Eikon data. That’s down from 62% odds prior to the data release.

The Dow Jones Industrial Average fell 150.27 points, or 0.43%, to 35,065.62, the S&P 500 lost 23.86 points, or 0.53%, to 4,478.03 and the Nasdaq Composite dropped 45.18 points, or 0.32%, to 13,914.54.

The weekly percentage declines for the S&P and Nasdaq were the biggest since March, with some investors taking profits after five months of gains due to economic data, disappointing earnings and rising Treasury yields.

Of the 422 companies in the S&P 500 that have reported quarterly earnings as of Friday, 79.1% have surpassed autonomous expectations, according to Refinitiv data.

Carl Icahn-owned investment firm Icahn Enterprises shed 23.3%. The company halved its quarterly payout, months after short-seller Hindenburg Research accused it of operating a “Ponzi-like” structure to pay dividends.

Fortinet tumbled 25.1% after the cybersecurity firm cut its annual revenue forecast as spending from enterprise clients remained tight amid a turbulent economy.

Shares of Tupperware, known for its plastic airtight storage containers and bowls, rallied 35.5% after the company finalized an agreement with its lenders to restructure its debt obligations in an effort to turn around the business.

Amgen added 5.5% after it reported a higher quarterly profit on strong sales of its cholesterol, osteoporosis and other drugs.

DraftKings’ shares rose 5.8% after the sports-betting firm raised its fiscal year 2023 revenue outlook.

Volume on U.S. exchanges was 11.39 billion shares, compared with the 10.87 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners.

The S&P 500 posted 19 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 54 new highs and 91 new lows.

Reuters, Globe staff

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