Skip to main content

Wall Street’s main indexes scored record closing highs on Friday and booked solid gains for the week following a strong U.S. jobs report and positive data for Pfizer’s experimental pill against COVID-19.

Canada’s main stock index also scaled a record high, bolstered by higher resource prices and upbeat corporate earnings as well as domestic data showing further employment gains.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 113.69 points, or 0.5%, at 21,455.82. For the week, the index was up nearly 2%.

“The TSX has the wind at its back right now,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Higher oil prices, a move by Canada’s financial regulator to lift curbs on capital distributions by financial institutions and “solid” domestic jobs data have helped underpin the index, Cieszynski added.

Canada added 31,200 jobs in October, building on blockbuster gains in previous months, and hours worked edged closer to their pre-pandemic levels.

The S&P 500 and the Nasdaq notched record high closes for their seventh straight sessions, while the Dow Jones Industrial Average also closed at a record. All three indexes posted weekly gains for their fifth straight weeks.

The Labor Department report showed U.S. employment increased more than expected in October as the headwind from the surge in COVID-19 infections over the summer subsided.

A trial of Pfizer Inc’s experimental antiviral pill for COVID-19 was stopped early after the drug was shown to cut by 89% the chances of hospitalization or death for adults at risk of developing severe disease. Pfizer shares jumped about 11%.

The news kept the run going for equities after investors earlier in the week digested the Federal Reserve’s decision to start reducing its monthly bond purchases put in place to support the economy.

“Momentum that we have seen this week has continued, and the jobs report and the Pfizer announcement certainly are providing positive data points for investors to put more money into the market right now,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

The Dow Jones Industrial Average rose 203.72 points, or 0.56%, to 36,327.95, the S&P 500 gained 17.47 points, or 0.37%, to 4,697.53 and the Nasdaq Composite added 31.28 points, or 0.2%, to 15,971.59.

For the week, the S&P 500 rose 2%, the Dow added 1.42%, while the Nasdaq gained 3.05%.

Travel stocks rose following Pfizer’s announcement, with the S&P 1500 airlines index climbing 7%, and cruise operators Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise rising between about 8% to 9%.

“Still early to be definitive but this (pill) looks like a true game changer for many industries like leisure and transportation, you’re seeing it reflected in the prices,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

Among S&P 500 sectors, energy and industrials led the way, rising 1.4% and 1%, respectively.

Health care was the only sector that ended negative, falling 1%. The Pfizer news weighed on shares of competitors such as Merck, which fell nearly 10%, and COVID-19 vaccine makers such as Moderna, which slumped 16.6%.

Shares of so-called “stay-at-home” names fell, with Zoom Video Communications down 6.2% and Netflix Inc off 3.4%.

Better-than-expected third-quarter earnings have helped lift sentiment for equities. With about 440 companies having reported, S&P 500 earnings are expected to have climbed 41.5% in the third quarter from a year earlier, according to Refinitiv IBES.

U.S. crude prices settled 3.1% higher at $81.27 a barrel after OPEC+ producers rebuffed a U.S. call to raise supply to cool the market, helping to lift energy shares.

The TSX energy sector advanced 2.6%, while the materials group, which includes precious and base metals miners and fertilizer companies, added 1.6%.

Gold was up 1.4% at about $1,816 per ounce as major central banks’ dovish tone on interest rates this week lifted the demand for the safe-haven metal.

In stock moves, Manulife Financial became the country’s first financial company to announce the resumption of dividend increases. Its shares rose 1.4%.

Canada Goose Holdings Inc shares soared 19.3% after the company topped analyst expectations for second-quarter revenue and said it is eyeing a strong holiday season this year.

Shares of Canopy Growth Corp weighed on the healthcare sector, falling 11.7% after the pot producer pushed back its target for turning profitable.

In the U.S., Pinterest Inc shares climbed 5.9% after the company’s strong fourth-quarter revenue forecast.

Peloton Interactive Inc shares slumped 35.3% after the company slashed its full-year sales forecast by up to $1 billion.

Advancing issues outnumbered declining ones on the NYSE by a 2.16-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored advancers. The S&P 500 posted 83 new 52-week highs and two new lows; the Nasdaq Composite recorded 303 new highs and 80 new lows. About 11.5 billion shares changed hands in U.S. exchanges, compared with the 10.5 billion daily average over the last 20 sessions.

U.S. Treasury yields tumbled and the curve flattened in choppy trading amid uncertainty as to how the latest employment data, which showed job growth surged more than expected in October, could affect the timing and size of future Federal Reserve rate hikes.

The benchmark 10-year yield, which fell to its lowest level since Sept. 24 at 1.436% and marked its biggest downward move since July 19, was last 7.4 basis points lower at 1.4496%.

Canadian bond yields moved largely in lockstep.

Gennadiy Goldberg, senior rates strategist at TD Securities, said the market was lowering its forecast for the terminal funds rate, which would be the level where the Fed stops hiking rates.

“The market is pushing back on the notion that the Fed is going to be able to hike rates too aggressively here,” he said.

After the U.S. central bank announced on Wednesday that it would start tapering its asset purchases this month and stuck to its view that high inflation is expected to be transitory, Fed Chair Jerome Powell told reporters the economy is not yet at maximum employment, meaning it is not time to raise interest rates.

Goldberg said some of Friday’s market volatility could be investor positioning ahead of the weekend.

“It is a very noisy, very choppy market and I think that chop is going to continue into next week when we get the (consumer price index) report,” he said.

Read more: Stocks that saw action on Friday - and why

Reuters, Globe staff

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error

Editorial code of conduct