Gains in the energy sector and technology stocks helped boost Canada’s main stock index, while U.S. stock markets were mixed.
The S&P/TSX composite index closed up 82.26 points, or 0.5 per cent at 16,545.21, according to unofficial figures.
All 11 TSX sectors gained. Energy stocks gained 1.4 per cent. Canadian Resources rose 3.1 per cent, Suncor was up 2.4 per cent and Cenovus Energy added 0.9 per cent.
Major Canadian oil companies, which publicly disagreed over the Alberta government’s forced curtailments this year, are in lockstep over how to end the production limits and reinvigorate the battered industry. Senior executives from Suncor Energy, Canadian Natural Resources, Imperial Oil and Cenovus Energy said at a TD Securities investor conference in Calgary on Tuesday that they are in talks with Premier Jason Kenney’s Alberta government. The discussions centre on ending the mandatory cuts just as added rail capacity to move crude comes online.
Oil futures rose on Tuesday as Middle East tensions and OPEC supply cuts kept global benchmark Brent crude above $64 a barrel, while gains were limited by the U.S.-China trade dispute that has dragged on the global economy and crimped oil demand. U.S. West Texas Intermediate crude settled up 17 cents US to US$57.83.
Tech stocks rose 0.6 per cent, as U.S. tech stocks also gained. BlackBerry rose 2.1 per cent, Photon Control added 1.8 per cent, and Open Text rose 1.7 per cent.
There was more trouble for CannTrust Holdings Inc. as its Danish partner has quarantined a batch of products received from the licensed producer in connection with Health Canada’s recent discovery of illegal growing operations at its Ontario greenhouse. Stenocare said Tuesday that it has been in contact with the Danish Medicines Agency and the single batch has been put in quarantine for potential destruction, pending an ongoing investigation by Health Canada. It’s shares fell 5.4 per cent on Tuesday after falling sharply on Monday. The health care index was flat, up only 0.06 per cent.
Financials rose 0.2 per cent with Genworth up 2.8 per cent, Element Fleet up 1.6 per cent and Intact up 1.6 per cent.
The S&P 500 ended slightly higher on Tuesday as gains in tech-related shares offset fresh worries about the impact of the U.S.-China trade dispute on earnings.
The Dow Jones Industrial Average fell 22.38 points, or 0.08 per cent, to 26,783.76, the S&P 500 gained 3.67 points, or 0.12 per cent, to 2,979.62 and the Nasdaq Composite added 43.35 points, or 0.54 per cent, to 8,141.73.
In the latest indication of the trade war hurting businesses, German chemicals giant BASF forecast a 30 per cent decline in its adjusted annual profit, and the S&P 500 chemical companies’ index fell 1.2 per cent.
Adding to the downbeat mood, RBC Capital Markets downgraded 3M Co. to “sector perform,” citing macro pressures from China, auto and electronics sectors. The industrial conglomerate’s shares fell 2.3 per cent and pulled the S&P industrial index down 0.4 per cent.
The second-quarter earnings season is expected to kick off next week, with analysts forecasting profits at S&P 500 companies to have fallen 0.2 per cent from a year earlier, according to Refinitiv IBES data.
Investors also braced for remarks this week from U.S. Federal Reserve Chairman Jerome Powell during his two-day testimony before Congress, which starts on Wednesday. Also due on Wednesday is the central bank’s June policy meeting minutes.
Wall Street’s main indexes have retreated from their record closing highs after a robust June jobs report on Friday tempered expectations of an aggressive 50-basis-point interest rate cut by the Fed.
“There may be some clarity coming out in the next couple of days based on what Powell says at these hearings,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
“The 10-year (Treasury) yield has just plummeted,” he said. “With flatter earnings coming into the third quarter, we’ve seen the PE multiple expansion courtesy of these lower rates.”
On the trade war front, the United States and China are set to relaunch trade talks this week after a two-month hiatus. White House economic adviser Larry Kudlow said discussions with the European Union on a trade pact were also progressing.
Gains in Amazon.com, Facebook Inc. and Netflix kept the Nasdaq in positive territory.
Netflix rose 01 per cent after Cowen and Co. said the video streaming services provider would benefit from high viewership for the recently released third series of its original show “Stranger Things.”
Reuters and The Globe and Mail