Canada’s main stock index closed higher Tuesday, as energy shares rose amid a surge in oil prices. Marijuana and tech stocks also rose.
A the close, the Toronto Stock Exchange’s S&P/TSX composite index ended up 73.25 points, or 0.47 per cent, at 15,642.10.
Energy stocks gained 1.5 per cent. Meg Energy rose 6.3 per cent, Crescent Point gained 5.8 per cent, and Cenovus added 3.9 per cent.
Oil prices rose more than 1 percent on Tuesday after OPEC figures showed it cut production sharply in January, and as lead member Saudi Arabia said it would reduce its output in March by an additional 500,000 barrels.
Growing investor optimism for a breakthrough in the latest round of U.S.-China trade discussions also boosted futures as members of both sides met in Beijing.
Brent crude futures gained 91 cents, or 1.5 per cent, to settle at US$62.42 a barrel. U.S. West Texas Intermediate (WTI) crude oil futures rose 69 cents, or 1.3 per cent, to settle at US$53.10 a barrel.
Health care stocks also rose, up 1.1 per cent, led by marijuana producers. Aphria was up 7.9 per cent, Canopy Growth gained 2 per cent, and Cronos Group added 0.7 per cent.
Aurora Cannabis Inc. shares, which rose in earlier trading, slid 0.3 per cent by the close. It reported that its revenue surged as it sold a record amount of cannabis in the quarter, but the pot producer’s selling price fell sharply as it entered the competitive recreational market.
Technology shares rose 0.8 per cent, as Quarterhill rose 4 per cent, and Constellation Software added 2 per cent. Shares of Shopify were down 1.1 per cent after it reported a quarterly profit that beat analyst estimates, but also a slowing rate of growth in total sales by vendors using the e-commerce company’s software.
Financial stocks rose 0.7 per cent. CI Financial was up 3.8 per cent, Canadian Western Bank rose 3.3 per cent and Home Capital was up 2.6 per cent.
The most heavily traded shares by volume were Aurora Cannabis Inc, Encana Corp and Aphria Inc.
In other stocks, DHX Media shares were down 13.25 per cent after it reported a loss of $17.9-million for the second quarter as a change in foreign exchange rates affected the carrying value of its debt and revenue fell.
Wall Street rallied on Tuesday as investors were heartened by a tentative congressional spending deal to avoid another government shutdown and by optimism surrounding the U.S.-China trade negotiations.
The Dow Jones Industrial Average rose 372.65 points, or 1.49 percent, to 25,425.76, the S&P 500 gained 34.93 points, or 1.29 percent, to 2,744.73 and the Nasdaq Composite added 106.71 points, or 1.46 percent, to 7,414.62.
The S&P 500 traded above its 200-day moving average for the first time since early December.
President Donald Trump said he would be willing to let the March 1 tariff deadline slide as top U.S. officials arrived in Beijing for high-level talks later in the week to hammer out a solution to the trade dispute between the world’s two largest economies.
Congress cobbled together a tentative bi-partisan border security deal on Monday to avert another government shutdown, but the White House indicated that Trump has not yet decided whether to support it. Funding for the Department of Homeland Security and a host of other agencies is due to expire on Friday.
“It’s somewhat befuddling that the possibility of no government shutdown is driving prices up,” said Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management in New York. “It means the narrative, pun intended, is trumping fundamentals,” he added. “We’re seeing swings based purely on emotion.”
The fourth-quarter earnings season is nearing the home stretch, with 70 per cent of companies in the S&P 500 having already reported. Of those, 71 per cent have beaten consensus estimates.
The outlook for 2019, however, is less rosy. First-quarter earnings are now expected to post a year-on-year decline of 0.3 per cent, which would be the first loss since the earnings recession ended in the second quarter of 2016.
“I think it’s 50/50 as to whether we enter another earnings recession,” Pursche said.
Tuesday’s gains were broad-based. Of the 11 major sectors of the S&P 500, all but real estate were trading higher. Technology stocks provided the biggest boost to the S&P 500, and they also led the Nasdaq’s advance.
Tariff-sensitive industrials headed up the Dow’s gain, led by 3M Co, Caterpillar Inc, United Technologies Corp and Boeing Co.
Amazon.com Inc provided the biggest lift to the S&P 500 and the Nasdaq, rising nearly 3 per cent after Walmart Inc. ended its partnership with logistics firm Devi for a rival same-day grocery delivery service.
Electronic Arts Inc announced its Apex Legends video game has signed up 25 million players in the week since its release, sending its stock up 5.2 per cent. The video game maker’s shares have soared by nearly 27 per cent since the game’s release.
Shares of Goldman Sachs Group were up 1.65 per cent after bank chief David Solomon, speaking at a conference in Florida, said the firm intends to increase its mid-size corporate client roster over the next few years.
Under Armour Inc jumped 4.5 per cent after the sportswear company beat analysts’ profit forecasts for the holiday quarter.