Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 9.BRENDAN MCDERMID/Reuters
Stocks on the Toronto Stock Exchange climbed, rebounding from a month low, as Canada's largest lenders and energy producers rose following reports oil-sands producers will restart production after wildfires that engulfed northern Alberta moved away from their facilities.
The benchmark S&P/TSX composite index jumped 1.56 per cent to close at 13,775.19 in Toronto, poised for the steepest gain in two months. The gauge now trades at 20.8 times earnings, about 7.8 per cent higher than the 19.3 times earnings valuation of the S&P 500, data compiled by Bloomberg show.
The Canadian dollar rose to 77.44 cents (U.S.), up about a quarter of a cent U.S.
Energy producers climbed 1.86 per cent as a group, behind the materials group up 2.61 per cent and the information technology sector up 1.99 per cent. Suncor Energy Inc. added 1.3 per cent and Canadian Natural Resources Ltd. gained more than 3 per cent. Crude futures bounced back from a two-week low, trading above $44 (U.S.) a barrel in New York. West Texas Intermediate for June delivery rose $1.22 to $44.66 a barrel on the New York Mercantile Exchange. It was the biggest increase since April 27.
Producers including Suncor, Syncrude Canada Ltd. and Royal Dutch Shell Plc took an estimated 1 million barrels a day offline over the past week due to the wildfires that devastated and still blaze near Fort McMurray in Alberta. The companies are now seeking to bring workers back and start up plants. Officials said Monday rain and cooler temperatures were helping firefighters battle the flames, which still cover an area the size of Calgary.
Canadian oil and gas companies are leading a drop in investment plans for a second year, with spending by companies and governments on non-residential construction, machinery and equipment to fall 4.4 per cent in 2016, according to Statistics Canada. Capital spending in the mining, quarrying and oil and gas industry will drop 23 per cent this year.
Royal Bank of Canada and Bank of Nova Scotia added at least 1 per cent as financial services stocks increased as a group. Industrial shares also rallied, led by gains in railway operators Canadian National Railway Co. and Canadian Pacific Railway Ltd.
Intertape Polymer Group Inc. sank 7.6 per cent, the most since August, after first-quarter revenue that trailed analysts' estimates were blamed on the South Carolina flood. The flood resulted in about $5-million worth of lost sales of masking tape and stencil products, the company said.
Badger Daylighting Ltd. dropped 2.1 per cent, trading at a month low, before regaining ground to close up 0.2 per cent, after also posting first-quarter earnings that fell short of analysts' expectations. Cash flow from operations plunged 36 per cent from year-ago levels amid lower revenue and gross profit. The excavating company also raised its dividend.
U.S. stocks ended sharply higher on Tuesday, with a rally in Amazon.com helping propel the S&P 500 to its best day in two months. The bearish sentiment that hit traders in the past two weeks is easing amid a bounce in commodities, with the S&P 500 rising the most in four weeks to join in equity market gains from Japan to Europe.
Energy producers, industrial shares, banks and Amazon.com Inc. were among the strongest contributors to a rally that jolted equities out of a recent torpor. The online retail giant climbed 3.1 per cent to an all-time high after an analyst boosted the price target on the shares to $1,000. The Bloomberg Commodity Index rebounded from the biggest drop in six weeks, bolstering sentiment toward raw-material companies.
The Dow Jones industrial average was up 222.16 points, or 1.25 per cent, to 17,928.07, the S&P 500 had gained 25.68 points, or 1.25 per cent, to 2,084.37 and the Nasdaq composite had added 59.67 points, or 1.26 per cent, to 4,809.88.
"Some of the same factors driving commodities are driving global growth and equities in general," said Greg Woodard, a senior analyst and strategist at Fairport, New York-based Manning & Napier Inc., which oversees about $46-billion. "If they feel better about growth in China, in emerging markets and global growth, they feel more positive about equities and commodities. The commodity space is really a barometer as opposed to driving equities."
Bloomberg News, Reuters