Traders work on the floor of the New York Stock Exchange in New York, Sept. 2.Brendan McDermid/Reuters
Canadian stocks swung between gains and losses on Wednesday after a two-day slide, as the global selloff in equities eased.
Equities erased an earlier gain of as much as 1.1 per cent as a slump in energy producers offset an advance in the nation's largest lenders. Valeant Pharmaceuticals International Inc., the second-largest company by market capitalization, advanced 1.4 per cent after agreeing to buy a surgical devices company.
Global stocks had tumbled in the previous two days amid rising concern a slowdown in China's economy and slump in its equity markets would affect growth around the world. China is Canada's second-largest trading partner. Data yesterday indicated Canada's economy slid a second quarter, meeting the technical definition of a recession, amid a rout in crude prices.
The Standard & Poor's/TSX Composite Index fell 1.58 points to 13,480.32, or less than 0.1 per cent, at 11:15 a.m. in Toronto. The equity gauge has dropped 7.9 per cent in 2015.
The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year as crude plunged. Oil in New York resumed a slide today, falling 2.9 per cent after tumbling 7.7 per cent Tuesday. A government report showed that U.S. crude inventories rose the most in four months. Suncor Energy Inc. slipped 2.9 per cent and Canadian Natural Resources Ltd. lost 2.3 per cent.
Energy and raw-materials producers are the worst-performing industries among 10 in the S&P/TSX this year. The S&P/TSX Energy Index has slumped 5.9 per cent in two days and is down 21 per cent for the year.
The Bloomberg Commodity Index, a basket of 22 resources including crude, copper and gold, slipped 0.7 per cent for a second straight decrease. The gauge has lost about 3 percent in that period.
Valeant rose, snapping a two-day retreat after agreeing to buy Synergetics USA Inc. in a cash deal worth $6.50 a share. Synergetics, a supplier of precision surgical devices, will enhance Valeant's Bausch & Lomb eye-care business, the company said in the release.
Colliers International Group Inc. jumped 3.6 per cent, the biggest gain in almost a month, after agreeing to buy real- estate firm Gateway Commercial in St. Louis for an undisclosed sum.
U.S. stocks advanced, after the Standard & Poor's 500 Index posted one of its steepest drops this year, amid a respite from a global equities selloff.
Technology shares led the climb, after pacing the rout yesterday, as Apple Inc. and Intel Corp. rose more than 1.9 per cent. H&R Block Inc. jumped 6.2 per cent after announcing a stock buyback plan. McDonald's Corp. and Home Depot Inc. added at least 1.5 per cent. Airlines rallied as crude pulled back, while energy companies fell for a second day.
The S&P 500 Index rose 0.6 per cent to 1,925.77 at 11:14 a.m. in New York, after earlier climbing as much as 1.3 per cent. The gauge fell 3.8 per cent over the previous two sessions. The Dow Jones Industrial Average added 113.41 points, or 0.7 per cent, to 16,171.76. The Nasdaq Composite Index gained 0.8 per cent.
"China's going to be closed the next few days and that means there won't be this negative lead-in to markets in the morning so that will be a nice reprieve," said Stephen Carl, principal and head equity trader at Williams Capital Group LP. "The date for a potential rate raise is certainly going back and forth and with the recent volatility in the market and situation overseas, people don't have much conviction on when it will be."
The benchmark equity gauge's 3-per-cent decline on Tuesday - its third-biggest of 2015 - marked a sour start to what has historically been the worst month of the year. The S&P 500 falls 1.1 per cent on average in September, according to data compiled by Bloomberg going back to 1927.
Another troubling sign is that futures on Chicago Board Options Exchange Volatility Index have climbed, showing traders predict turbulent markets will endure. The gauge known as the VIX fell 5.4 per cent Wednesday to 29.70, after a record monthly jump in August,up 135 percent.
The S&P 500 slumped 6.3 per cent in August as China's currency devaluation spurred concern over global growth, erasing more than $5.7 trillion in equity market values worldwide, while volatility surged the most on record. The equity index entered a correction last week, only to then rally more than 6 percent over two days. It closed Tuesday 10 percent below its all-time high set in May.
Chinese shares closed lower on the last trading day of this week as investors assessed the level of state support before a major military parade on Thursday. Mainland markets will be closed Thursday and Friday to commemorate the end of World War II.
"Volatility will stay high for a while," said Teis Knuthsen, chief investment officer at Saxo Bank A/S's private- banking unit in Hellerup, Denmark. "China is still making people panic and a lot of us are concerned that we'll break the lows from last week. But many companies are starting to look very cheap now and the market will eventually find a support level, especially if the Fed doesn't raise rates this month."
Amid continuing concerns that China's slowdown will weigh on the global economy, traders are now pricing in a 34 percent chance that the Federal Reserve will raise interest rates this month, down from 38 percent on Monday. Policy makers have a little more than two weeks to assess incoming data before deciding whether to increase rates.
A report today on private payrolls showed companies added 190,000 workers in August, below the 200,000 forecast by economists surveyed by Bloomberg. Attention will focus on the government's monthly jobs report, due Friday, as a major data point before the Fed's meeting. A separate gauge Wednesday showed July factory orders rose 0.4 percent, less than the 0.9 percent growth forecast by economists. June orders grew 2.2 percent, revised up from a previously reported 1.8 per cent.
Eight of the S&P 500's 10 main groups increased on Wednesday, with technology, consumer discretionary and industrial companies performing the best. Energy and utilities slipped.
Along with Apple and Intel, a handful of semiconductor companies boosted the tech group. Nvidia Corp., Qorvo Inc. and Avago Technologies Ltd. all rose more than 1.3 per cent. Video- game makers Activision Blizzard Inc. and Electronic Arts Inc. advanced at least 1.8 per cent.
Transocean Ltd. and Chesapeake Energy Corp. lost more than 3.1 per cent as energy shares declined. West Texas Intermediate crude dropped 3 percent after a government report showed that U.S. crude inventories climbed the most in four months.