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The Nasdaq closed Wednesday at a record high, with the S&P 500 ending near its previous peak, as September kicked off with renewed buying of technology stocks and U.S. private payrolls data that supported the case for dovish monetary policy.

Canada’s main index finished at a record high of its own, as railway stocks jumped after regulators halted Canadian National’s deal to buy U.S. peer Kansas City Southern, potentially paving the way for rival Canadian Pacific to usurp the deal.

Technology stocks, which tend to benefit from a low-rate environment, were up in both Canada and the U.S. Apple Inc rose to its second record high this week, and Microsoft Corp, Inc and Google-owner Alphabet Inc all advanced.

Sectors considered as bond-proxies or defensive including utilities and real estate were also among the top performers on Wall Street.

“Given there’s going to be some choppiness in the economic recovery because of COVID, people will look for where they can find the best future growth potential,” said Chris Graff, co-chief investment officer at RMB Capital.

A report by ADP, published ahead of the U.S. government’s more comprehensive employment report on Friday, showed private employers hired far fewer workers than expected in August. The Canadian August jobs report won’t be released until next week.

Wall Street’s main indexes have hit record highs recently, with the benchmark S&P 500 notching seven straight monthly gains as investors shrugged off risks around a rise in new coronavirus infections and hoped for the Fed to remain dovish in its policy stance.

Another set of data on Wednesday showed U.S. manufacturing activity unexpectedly picked up in August amid strong order growth, but a measure of factory employment dropped to a nine-month low, likely as workers remained scarce.

Surveys earlier in the day showed Asian and European factory activity lost momentum last month as the coronavirus pandemic disrupted supply chains.

“We’ve got the jobs report on Friday, but what’s become more important is the job openings report next week and the CPI release after that, so a lot about employment and inflation in the next couple of weeks which will reset people’s expectations for tapering and interest rates,” Graff added.

The S&P/TSX Composite Index closed at 20,689.58, up 106.64 points, or 0.52%. Tech stocks rose 1.33%, while both financials and energy edged up slightly.

The industrials index rose more than 2%, as both Canadian Pacific Railway Ltd and Canadian National Railway Co rallied following the rejection of a voting trust structure that would have allowed the latter to buy Kansas City for US$29 billion. CN Rail closed up 3.77% and CP Rail 5.14%.

The two Canadian companies are competing to buy the U.S. railroad and Canadian Pacific initially fell 5% on Tuesday as investors priced in a greater likelihood of it having to make good on its own offer for Kansas City.

Traders said many now thought the deal would be good for Canadian Pacific.

“We’re seeing the continuation of the short cover from Canadian National today and more people picking up that the Canadian Pacific sell-off yesterday was overdone and it’s probably going to be good news if they can win this deal,” said Gregory Taylor, portfolio manager at Purpose Investments.

Citi Research analyst Christian Wetherbee upgraded CN Rail to “buy” from “neutral” while raising his price target to US$140 from US$127. “We we think the stock is likely to benefit from the potential that the KSU deal goes away (removing the regulatory overhang) and a refocus from management on operating ratio,” he said in a note to client.

Canada’s benchmark equity index has risen for seven straight months, tracking a jump in its U.S. peers as investors bet on easy money to lift demand for risky assets despite signs of a wobbly economic rebound.

Data on Wednesday showed Canadian manufacturing activity grew in August at the fastest pace in four months as new orders climbed and firms scrambled to reduce the risk of running out of the stocks they need for production

Unofficially, the Dow Jones Industrial Average fell 47.51 points, or 0.13%, to 35,313.22, the S&P 500 gained 1.49 points, or 0.03%, to 4,524.17 and the Nasdaq Composite added 50.15 points, or 0.33%, to 15,309.38.

The energy index registered its third straight fall.

Crude prices were flat after OPEC and its allies agreed to stick to their existing policy of gradual output increases. However, the full extent of damage to U.S. energy infrastructure from Hurricane Ida is still being established

More than 80% of oil and gas production in the Gulf of Mexico remains offline, while analysts have warned that restarting Louisiana refineries shut by the storm could take weeks and cost operators tens of millions of dollars in lost revenue.

PBF Energy Inc, whose 190,000 barrel-per-day Chalmette, Louisiana, refinery lost power following the storm, slumped on Wednesday.

Shares of Calvin Klein and Tommy Hilfiger owner PVH Corp surged to the top of the S&P 500 after it raised its full-year earnings forecast.

Reuters, Globe staff

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