Skip to main content

Canada’s main stock index rose on Monday to near a record high as investors grew more optimistic the global economy was moving past the coronavirus pandemic, with the index adding to strong gains in October.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 209.94 points, or 1%, at 21,247.01, just shy of last Monday’s record closing high at 21,284.84.

The index advanced 4.8% in October, its biggest monthly gain in 11 months.

“COVID is starting to be in the rearview mirror and that is giving people optimism,” said Sadiq Adatia, chief investment officer at BMO Asset Management.

“It possibly means that all that pent-up savings will slowly start to be spent. You are starting to see the (economic) reopening, which means people are going back to work,” Adatia added.

Canadian manufacturing activity grew in October at the fastest pace in seven months as a pickup in new orders and hiring offset mounting supply chain pressures, data showed.

Among the strongest-performing sectors was energy. It ended 1.9% higher as oil prices jumped on expectations of strong demand.

U.S. crude oil futures settled 0.6% higher at $84.05 a barrel.

Information technology advanced 2%, while healthcare ended up 3.1%, helped by gains for cannabis stocks.

Shares of alternative fuel systems manufacturer Westport Fuel Systems Inc jumped 15.7% to their highest in nearly two months. Home Capital Group Inc ended 5.6% higher after brokerage BMO raised its rating and price target.

Cargojet Inc was among the biggest decliners, ending 5.5% lower. The air cargo service provider reported a surprise loss in the third quarter.

Wall Street also rose as investors looked ahead to a major Federal Reserve meeting later in the week.

The Nasdaq rose on Monday and the S&P 500 edged higher as gains for energy shares and Tesla buoyed indexes.

The Dow Jones Industrial Average eclipsed 36,000 points for the first time ever during intraday trading.

Accommodative monetary policy has been one of the key supports for the stock market, with the benchmark S&P 500 rising 22.8% so far this year.

The Federal Reserve on Wednesday is expected to approve plans to scale back its US$120 billion monthly bond-buying program put in place to help the economy during the coronavirus pandemic, while investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is.

“This (meeting) is going to be a relatively big deal,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “We are expecting to hear the glide path for tapering the bond purchases.”

The Dow Jones Industrial Average rose 94.28 points, or 0.26%, to 35,913.84, the S&P 500 gained 8.29 points, or 0.18%, to 4,613.67 and the Nasdaq Composite added 97.53 points, or 0.63%, to 15,595.92.

Tesla shares jumped 8.5%, helping lift the S&P 500 consumer discretionary sector about 1.5%.

Shares of the electric car maker have charged higher since the company’s market value crossed US$1 trillion last week.

Among S&P 500 sectors, energy led the way, rising 1.6%, while the communications services group dropped 0.7%.

The small-cap Russell 2000 index was a standout, rising 2.7% for its biggest daily percentage gain since late August.

A survey on Monday showed U.S. manufacturing activity slowed in October, with all industries reporting record-long lead times for raw materials, indicating that stretched supply chains continued to constrain economic activity early in the fourth quarter.

With over half of S&P 500 companies having reported, third-quarter earnings are expected to have climbed 39%, according to Refinitiv IBES.

“There continues to be positive sentiment around earnings despite some high-profile misses,” said Kristina Hooper, chief global market strategist at investment management firm Invesco.

In company news, Harley-Davidson Inc shares jumped 9.1% after the European Union removed retaliatory tariffs on U.S. products, including whiskey, power boats and company’s motorcycles.

Advancing issues outnumbered declining ones on the NYSE by a 2.84-to-1 ratio; on Nasdaq, a 3.05-to-1 ratio favored advancers. The S&P 500 posted 46 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 208 new highs and 39 new lows. About 10.5 billion shares changed hands in U.S. exchanges, compared with the 10.3 billion daily average over the last 20 sessions.

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.