Canada’s S&P/TSX Composite Index posted an advance Tuesday to close at another record high, even as the S&P 500 index finished lower, thanks to an uptick in the energy and materials sectors.
The Canadian benchmark index closed up 77.35%, or 0.41%, to 19,104.14, with the energy sector rising nearly 1% and materials 2%. Performance was otherwise mixed and lacklustre. Transat A.T. shares lost a further 3.84% following news Friday that Air Canada dropped its bid for the company.
Strong economic data from China and the United States helped lift oil prices, recouping some of the previous session’s losses. U.S. West Texas Intermediate (WTI) crude rose 68 cents, or 1.2%, to settle at $59.33 a barrel.
Oil prices were buoyed as data showed U.S. services activity touched a record high in March. China’s service sector also gathered steam with the sharpest increase in sales in three months.
In addition, England is set to ease more coronavirus restrictions on April 12, allowing businesses including all shops, gyms, hair salons and outdoor hospitality venues to reopen.
The market is recovering from steep losses on Monday, when oil fell by about $3 because of increasing OPEC+ oil supply and rising COVID-19 infections in India and parts of Europe.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, agreed last week to return 350,000 barrels per day (bpd) of supply in May, another 350,000 bpd in June and a further 400,000 bpd or so in July.
Gold prices rose about 1% and hit the highest in more than a week, boosted by a retreating U.S. dollar and lower U.S. Treasury yields. Spot gold was trading at $1,743.04 per ounce in late afternoon trading.
Gold has been lifted temporarily by a steady decline in the dollar index and lower Treasury yields, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
The U.S. dollar fell to a near two-week low, making gold cheaper for holders of other currencies, while benchmark U.S. Treasury yields drifted lower.
U.S. 5-year notes led the decline in yields, falling seven basis points to 0.872% after hitting 14-month highs on Monday. U.S. 10-year and 30-year yields fell to more than one-week lows.
The Canadian five-year government bond yield - influential on fixed mortgage rates of the same duration - was quoted at 0.95% in late afternoon trading, its lowest level since the end of March.
Stocks on Wall Street pulled back from the prior session’s record closing highs, as investors trained their focus on the approaching earnings season and the Federal Reserve’s economic outlook.
All three major U.S. stock indexes closed in the red, led by the blue-chip Dow, which notched an all-time closing high on Monday.
“It’s a normal follow-on to a strong day,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. “The market is catching its breath from the job number and a strong day like yesterday, which reflected a high in the market.”
The market often takes a breath as earnings season draws near, a first-quarter results will be significant, marking the anniversary of the coronavirus outbreak.
“How the market digests those first year-over-year comps remains to be seen,” Keator added. “Generally speaking, it’s understandable to have a positive outlook based on a significant amount of pent-up demand.”
The U.S. Federal Reserve is expected to release the minutes from its last monetary policy meeting on Wednesday and market participants will parse it for any changes to the central bank’s economic outlook.
“The market is going to be dissecting (Federal Reserve Chairman Jerome) Powell’s comments to see if there’s anything embedded in them that might reflect a change in policy,” Keator said.
The Dow Jones Industrial Average fell 96.95 points, or 0.29%, to 33,430.24, the S&P 500 lost 3.97 points, or 0.10%, to 4,073.94 and the Nasdaq Composite dropped 7.21 points, or 0.05%, to 13,698.38.
European stocks closed at a record high, having recovered all pandemic-related losses as investors bet on a speedy global economic recovery.
The pan-European STOXX 600 index rose 0.70% and MSCI’s gauge of stocks across the globe gained 0.18%.
Reuters, Globe staff
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