Canada’s main stock index rose sharply after opening at a near one-month high on Wednesday, helped by gains in energy and material companies, and after the Bank of Canada issued an optimistic economic growth outlook.
At 11:26 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite Index was up 199.65 points, or 1.3 per cent, to 15,552.95, rising after four straight sessions of gains.
The Bank of Canada maintained interest rates at 1.25 per cent, as expected, but said more hikes will be needed over time amid progress on the dynamics of wage growth and inflation.
The energy sector rose 2.7 per cent, as prices of oil, one of Canada’s major exports, rallied on rising supply concerns. Crescent Point Energy Corp. rose 5.4 per cent in morning trading, while Cenovus Energy Inc. jumped 4.4 per cent.
Pipeline company Enbridge Inc and oil and gas producer Canadian Natural Resources ticked 1.8 per cent higher and boosted the energy sector.
The materials sector, which includes precious and base metals miners and fertilizer companies rose 2.4 per cent, led by a 6.9-per-cent increase by First Quantum Minerals Ltd..
The financial sector, which accounts for about 35 per cent of the index’s weight, advanced 1 per cent helped by gains in the heavyweight big banks. Royal Bank of Canada sat up 1.2 per cent and Bank of Nova Scotia rose 1 per cent.
U.S. stocks were modestly higher in morning trading Wednesday, bouncing back from an early wobble and extending gains from a day earlier. Gains by retailers and industrial companies outweighed losses in technology as several chipmakers declined. Energy stocks climbed as crude oil prices surged.
The S&P 500 index rose 9 points, or 0.4 per cent, to 2,716 as of 11:31 a.m. Eastern Time. The Dow Jones industrial average gained 19 points, or 0.1 per cent, to 24,806. The Nasdaq composite added 27 points, or 0.4 per cent, to 7,308. The Russell 2000 index of smaller-company stocks picked up 8 points, or 0.6 per cent, to 1,588.
“Earnings are the principal thing this week,” said Paul Christopher, head of global market strategy for Wells Fargo Investment Institute. “The market wants to see more consistent evidence of strong earnings.”
Textron jumped 7.8 per cent to $64.63 after the plane and helicopter maker delivered quarterly results that beat analysts’ forecasts. The company also said it will sell its tools and test division to Emerson for $810 million.
Morgan Stanley rose 1.6 per cent to $54.11 after the investment bank’s first-quarter profit hit a record high, helped by a lower tax bill and a boost in revenue from the market volatility earlier this year.
Shares in United Continental climbed 5.3 per cent to $70.93 after the airline company raised its earnings outlook for the year.
CSX rose 6.8 per cent to $64.05 after the railroad operator said its latest quarterly profit almost doubled as the company slashed costs. CSX also said it is running trains on a tighter schedule and using fewer locomotives.
Best Buy added 3.6 per cent to $75.40 after the consumer electronics retailer announced a partnership with Amazon to sell new Fire TV that allow users to order goods through Amazon.
Lam Research dropped 4.6 per cent to $202.50 after the semiconductor manufacturing equipment maker said it expects shipments to decrease in the second quarter compared to the first. Applied Materials lost 4.6 per cent to $55.18.
Shares in IBM slid 7.3 per cent to $149.21 after the technology company said its profit margins decreased and analysts weren’t impressed with its first-quarter results.
Benchmark U.S. crude rose $1.55, or 2.3 per cent, to $68.07 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, added $1.47, or 2.1 per cent, to $73.03 per barrel in London.
The surge in oil prices helped lift energy stocks. Newfield Exploration added 5.5 per cent to $27.79.
China imposed preliminary anti-dumping tariffs of 178.6 per cent on U.S. sorghum. The United States told the World Trade Organization it has agreed to discuss with China the Trump administration’s tariff increases on steel and other Chinese goods. President Donald Trump has threatened to raise tariffs on up to $150 billion of Chinese goods due to disputes over technology policy, market access and Beijing’s trade surplus with the United States. China responded with its own list of U.S. goods for retaliation. Investors worry other governments might raise their own import barriers.
In Europe, Germany’s DAX rose 0.1 per cent, while France’s CAC 40 rose 0.5 per cent. Britain’s FTSE 100 added 1.3 per cent. Indexes in Asia finished higher. Tokyo’s Nikkei 225 rose 1.4 per cent, while Hong Kong’s Hang Seng added 0.7 per cent. Seoul’s Kospi rose 1.1 per cent.
Reuters and The Associated Press