Volatility continued to grip North American stock markets with gains to begin the week after days of large movements that culminated in the biggest weekly loss in three months. Mining shares rose as the retail trading frenzy shifted to silver. Uranium shares were also scorching hot.
The S&P/TSX composite index closed up 355.43 points or about 2% to 17,692.45 after losing 320.18 points on Friday. The advance was broadly based across sectors, with energy, materials and technology all gaining at least 3%. Similar to Friday, silver stocks were on fire as investors rushed to cover short positions after the Reddit retail crowd further turned their attention to the precious metal. Avino Silver & Gold Mines was up 48%, SilverCorp Metals 25%, First Majestic Silver 23%, and Endeavour Silver 20%.
The iShares Silver Trust ETF, the largest silver-backed ETF, jumped as silver broke above $30 an ounce for the first time since 2013, with retail traders jumping into the metal after betting billions of dollars on stocks last week.
“The retail trader focus today seems to be on silver, and it’s considered to be a small pocket of the market,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
But even though the recent trading frenzy may have changed course, it has likely not gone away, she said. “The fact of the matter is this is a powerful move in the markets, and it’s not just going to dissipate.”
Uranium was also glowing with gains on Monday, including an 18% jump in shares of sector leader Cameco. This followed a bullish Bank of America note that pointed out the Democrats under Joe Biden are increasingly embracing nuclear power, and that delays to nuclear plant closures over the next decade could meaningfully boost demand for the metal.
The S&P 500 technology sector gave the S&P 500 its biggest boost in the broad rally. Microsoft and Apple were among the biggest positive influences.
Unofficially, the Dow Jones Industrial Average rose 229.92 points, or 0.77%, to 30,212.54, the S&P 500 gained 60.19 points, or 1.62%, to 3,774.43 and the Nasdaq Composite added 330.94 points, or 2.53%, to 13,401.64.
U.S. President Joe Biden will meet 10 moderate Republican senators on Monday to discuss their proposal to shrink his sweeping $1.9 trillion U.S. COVID-19 relief package, even as Democrats prepare to push legislation through Congress without Republican support.
Wall Street’s main indexes last week logged their steepest weekly fall since October, as investors digested efficacy data from Johnson & Johnson’s COVID-19 vaccine trial results, and a battle between Wall Street hedge funds and retail investors added to volatility.
The CBOE volatility index eased on Monday from three-month highs that were fueled by a surge in shares of GameStop Corp, AMC Entertainment Holdings and others that burned hedge funds that had bet against the companies.
Robinhood, the U.S. online broker that has emerged as a gateway for amateur traders challenging Wall Street hedge funds, has held talks with banks about raising $1 billion in debt so it can continue to fulfill orders for heavily shorted stocks, according to a Reuters report, citing people familiar with the matter.
Focus also will be on more quarterly earnings reports this week.
The latest ISM survey was mixed as U.S. manufacturing activity slowed slightly in January, while a measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10 years.
The March crude contract was up US$1.35 at US$53.55 per barrel and the March natural gas contract was up 28.6 cents at US$2.85 per mmBTU.
The April gold contract was up US$13.60 at US$1,863.90 an ounce and the March copper contract was down one cent at nearly US$3.55 a pound.
Read more: Stocks that saw action Monday - and why
Reuters, The Canadian Press, Globe staff
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