Major North American stock indexes rose on Monday as investors put behind them some of the pessimism that weighed on markets at the end of last week and looked ahead to what was expected to be a relatively upbeat earnings season.
Investors were monitoring the Israeli war in Gaza, but appeared to be taking more of a risk-on stance, with safe-haven gold prices down.
The Cboe Volatility index was lower, while the Dow registered its biggest daily percentage gain in about a month. Also, the economically sensitive Dow Jones transportation average jumped 1.9% in its biggest one-day percentage increase since late July, and the Russell 2000 small-cap index rose 1.6%.
The earnings season is kicking into high gear in the U.S. Results from large banks Goldman Sachs, Bank of America, Morgan Stanley, pharmaceutical giant Johnson & Johnson, electric vehicle maker Tesla and video-streaming pioneer Netflix are due this week.
Third-quarter earnings for S&P 500 companies are estimated to have increased 2.2% year-over-year, according to LSEG data Friday.
“At least for today, this is a market that sees a stronger earnings season, a stronger week in terms of earnings,” said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, North Carolina.
At the same time, global leaders are trying to make sure that the Middle East conflict “remains contained,” she said. Israeli forces continued their bombardment of Gaza, which has killed thousands, including many women and children, after efforts to arrange a cease-fire stalled.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 157.94 points, or 0.8%, at 19,620.80.
All 10 of the Toronto market’s major groups ended higher. Technology rose 1.3%, while financials, which account for 28% of the Toronto market’s weighting, were up 1.1%.
Gains for energy were more modest. The sector rose 0.3% as oil settled 1.2% lower at US$86.66 a barrel, giving back some of Friday’s rally. Tourmaline Oil agreed to buy rival Bonavista Energy for C$1.45 billion in cash and stock, strengthening its position in Western Canada’s Deep Basin. Its shares advanced 3.2%.
The Canadian inflation report for September is due on Tuesday. Money markets see a roughly 40% chance the central bank will tighten further at a policy decision next week.
The Bank of Canada said in a third-quarter survey Monday that more Canadian firms see inflation easing over the next two years than in the previous quarter, while the business outlook fell to its lowest level since the pandemic. The survey had minimal impact on markets. Canadian bond yields rose across a steeper curve, tracking moves in U.S. Treasuries. The 10-year was up 6.9 basis points at 4.042%.
The Dow Jones Industrial Average rose 314.25 points, or 0.93%, to 33,984.54, the S&P 500 gained 45.85 points, or 1.06%, to 4,373.63 and the Nasdaq Composite added 160.75 points, or 1.2%, to 13,567.98.
Data showed that the New York Fed’s General Business Conditions index, otherwise known as “the Empire State index,” has gone back into negative territory.
Philadelphia Fed President Patrick Harker reiterated his view from Friday that the U.S. central bank was likely done with its rate-hike cycle.
Lululemon Athletica shares rose to their highest level in almost two years as the Canadian sportswear apparel maker was set to join the S&P 500 index this week, replacing Activision Blizzard. Lululemon shares ended up 10.3%.
Charles Schwab shares jumped 4.7% as the brokerage posted a smaller-than-expected drop in quarterly profit.
Volume on U.S. exchanges was 9.60 billion shares, compared with the 10.38 billion average for the full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a 2.59-to-1 ratio; on Nasdaq, a 1.91-to-1 ratio favored advancers. The S&P 500 posted 11 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 33 new highs and 206 new lows.
Reuters, Globe staff