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Energy stocks led Canada’s main stock index higher on Monday, despite a plunge in crude prices as the market waits for news of support from Ottawa for the oil and gas industry.

The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 350.76 points, or 2.76%, at 13,038.50 The index fell as low as 12,548.96 in morning trading.

Nine of the index’s 11 major sectors were higher, paced by the energy sector, which rose 11.9%.

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Global oil benchmark Brent crude plunged to its cheapest in almost 18 years on Monday and U.S. crude briefly tumbled below $20 per barrel on growing fears the global coronavirus shutdown could last months and demand for fuel will decline further.

With Saudi Arabia and Russia set to flood the market with oil next month, producers and shippers have been scrambling to lock oil up in storage as demand falls.

Meanwhile, the coronavirus pandemic is expected to cause at least a 20% drop in fuel demand worldwide as governments take steps to restrict the spread of the virus.

Brent futures fell $2.17, or 8.7%, to settle at $22.76 a barrel, their lowest close since November 2002, while U.S. West Texas Intermediate (WTI) crude fell $1.42, or 6.6%, to $20.09, the lowest close since February 2002.

On Friday, Canada said it would cover 75% of wages for small businesses and the Bank of Canada cut its key interest rate by 50 basis points to 0.25%, its lowest level in a decade, as officials sought to limit layoffs and bolster an economy hard hit by the coronavirus pandemic.

The financials sector was up 2.8%. The industrials sector rose 3.5%.

The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.6% as gold prices gained.

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The Canadian dollar weakened against its U.S. counterpart on Monday as the price of oil fell and the greenback climbed against a basket of major currencies, with the loonie giving up some of the previous week’s sharp gains.

The Canadian dollar was trading 1.2% lower at 1.4153 to the greenback, or 70.66 U.S. cents. The currency, which on Friday touched an 11-day high at 1.3922, traded in a range of 1.4000 to 1.4184.

Last week, the loonie rallied 3.1%, its biggest weekly gain since October 2009.

The plunge in oil prices was the “the driving factor” for the Canadian dollar on Monday, said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.

Oil is one of Canada’s major exports.

Stocks pushed higher on Wall Street Monday, led by big gains for health care companies announcing developments that could aid in the coronavirus outbreak.

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The rally tacked more gains onto a recent upswing for the market, which is coming off the best week for the S&P 500 since hitting bottom after the financial crisis 11 years ago. Nascent optimism is budding on Wall Street that the worst of the selling may be over, but markets around the world remain tentative amid uncertainty about whether global authorities can nurse the economy through the pandemic. The S&P 500 remains about 23% below its record set last month, and oil tumbled to an 18-year low.

The Dow Jones Industrial Average rose 690.7 points, or 3.19%, to end at 22,327.48 points, the S&P 500 gained 85.18 points, or 3.35%, to 2,626.65 and the Nasdaq Composite added 271.77 points, or 3.62%, to 7,774.15.

European indexes rose modestly after erasing earlier losses. Asian markets were down, but by much milder degrees than the huge swings that have rocked investors over the last month.

Stocks jumped last week as the Federal Reserve promised to buy as many Treasurys as it takes to get lending markets running smoothly and Capitol Hill agreed on a $2.2 trillion rescue package for the economy. .

“The market wants to see everything line up, and last week everything lined up,” said Nela Richardson, investment strategist at Edward Jones, referring to the unprecedented aid from the Fed and Congress.

Now, she said, President Donald Trump also appears to be in sync with health experts about the need to restrict the economy to slow the spread of the virus. Trump on Sunday extended social-distancing guidelines, which recommend against group gatherings larger than 10, through the end of April after earlier saying he wanted the economy open by Easter.

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“Now that message is in line,” said Richardson. “All these things line up coming into this week, and that’s why you saw strong performance last week continuing today.”

Most voices on Wall Street are telling investors to prepare for more losses, but a 16% surge for stocks since last Monday has the first green shoots of optimism appearing.

Forced selling by investors looking to raise cash may be easing, and Morgan Stanley strategists said the worst may be behind us. They say another pullback in stocks is likely, but current levels offer some buying points for investors willing to wait six to 12 months. “Our base case is that the lows are in for this bear market for most stocks,” they wrote in a report.

Goldman Sachs, though, warned the market will likely turn lower in coming weeks, though they expect the S&P 500 to recover to 3,000 by the year’s end. One factor against markets is that companies aren’t buying back as much stock as politicians have railed against repurchases made before the outbreak. Any slowdown in buybacks will have a big impact because companies themselves have been the single biggest source of demand for U.S. stocks in recent years, according to Goldman Sachs.

Most investors say they expect markets to remain extremely volatile until the virus slows its spread. Until then, investors won’t know how long the economic downturn will ultimately last. In a sign of increased caution, the yield on the 10-year Treasury fell to 0.64% from 0.74% late Friday.

Economists expect a number of weak reports on the economy to come in through the week. The lowlight will likely be Friday’s jobs report, where economists expect to see the largest fall in the nation’s payrolls since the Great Recession.

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The number of known infections around the world has topped 741,000. The United States has the highest number in the world, more than 143,000. More than 156,000 people around the world have also recovered.

Most people who contract COVID-19 have mild or moderate symptoms, which can include fever and cough but also milder cases of pneumonia, sometimes requiring hospitalization. The risk of death is greater for older adults and people with other health problems.

Reuters and The Associated Press

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