Skip to main content

Canada’s main stock index rose on Tuesday to its highest closing level in more than three months as higher commodity prices bolstered resource shares and investors picked out areas of the market that could best weather an expected economic slowdown.

U.S. stocks also rose as a sales forecast by Best Buy dampened concerns high inflation would lead to a dismal holiday shopping season. Declines in the U.S. dollar and Treasury yields also helped support risk appetite.

The S&P/TSX Composite Index ended up 242.88 points, or 1.2%, at 20,220.01, its highest closing level since Aug. 18.

Financials rose 0.9%. The sector is up 14.3% from last month’s low.

Energy advanced 2.4% as the price of oil settled 1.1% higher at $80.95 a barrel, while the materials group, which includes precious and base metals miners and fertilizer companies, added 3.5%.

It was led by a gain of 9.8% for the shares of Eldorado Gold Corp, posting its highest closing level since June 10.

On Wall Street, Best Buy Co Inc shot up 12.78% as the best performing stock on the S&P 500 index, after the retailer forecast a smaller drop in annual sales than previously announced and expressed confidence a ramp up in deals and discounts will entice more customers.

The gains in Best Buy helped boost the S&P 500 retail index 1.21%.

In contrast, Dollar Tree Inc tumbled 7.79% as the worst performing S&P 500 component, which also capped gains for the retail index as the discount retailer cut its annual profit forecast for the second time.

“If you take the continuum of income and consumers out there, the upper half of that is relatively inelastic to some costs going up to some extent or another where the bottom half is going to be more sensitive,” said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.

“So the Dollar Trees of the world really don’t have much ability to pass through those costs so they are going to get hit pretty bad.”

The Dow Jones Industrial Average rose 397.82 points, or 1.18%, to 34,098.1, the S&P 500 gained 53.64 points, or 1.36%, to 4,003.58 and the Nasdaq Composite added 149.90 points, or 1.36%, to 11,174.41.

The S&P 500 closed at its highest level since Sept. 12.

As investors continue to try and gauge the path of Federal Reserve rate hikes, Cleveland Fed President Loretta Mester reiterated on Tuesday that lowering inflation remains critical for the central bank, a day after supporting a smaller rate hike in December. Kansas City President Esther George said the central bank may need to boost interest rates to a higher level and hold them there for longer in order to temper consumer demand and cool inflation.

Volume was light for the session and is likely to dwindle heading into the Thanksgiving holiday on Thursday, with the U.S. stock market open for a half-session on Friday.

In other stock moves, Dow component Walgreens Boots Alliance Inc rose 2.96% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push.

Manchester United shares jumped late in the session after Sky News reported the Glazer family, which owns the football club, was exploring financial options that could include an outright sale, and closed 14.66% higher.

Agilent Technologies Inc climbed 8.08% after the application-focused solutions company posted upbeat fourth-quarter revenue.

Advancing issues outnumbered declining ones on the NYSE by a 3.40-to-1 ratio; on Nasdaq, a 1.56-to-1 ratio favored advancers. The S&P 500 posted 24 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 108 new highs and 224 new lows.

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.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe