Canada’s main stock index rose to a two-month high on Friday as higher oil prices boosted energy shares, while industrials also posted solid gains as investors looked ahead to a busy slate of corporate earnings. U.S. stocks ended mixed.
The S&P/TSX composite index ended up 110.64 points, or 0.5%, at 20,547.51, its highest closing level since May 9. For the week, the index was up 1.4%.
Heavily weighted energy stocks climbed 1.1% on Friday, as oil settled 1.9% higher at US$77.07 a barrel after China announced measures to shore up the country’s sluggish growth.
“Oil prices continue to hover in the mid-$70s, which is a pretty good spot (for earnings),” said Mike Archibald, a portfolio manager at AGF Investments.
“Next week we should start to get a much better feeling for how investors want to interpret Q2 earnings. You are going to start to get lots of better indications on whether or not the move we’ve seen year-to-date is going to hold or not.”
Cenovus Energy Inc and Canadian National Railway Co, which is part of the industrials sector, are among the major Canadian companies set to report next week.
Industrials rose 0.8% and health care was up 1.5%.
Gains for consumer discretionary shares were modest. The sector advanced 0.5% as data showed Canadian retail sales rising 0.2% in May, missing estimates for a 0.5% gain.
On Wall Street, the Dow Jones Industrial Average rose marginally to notch its 10th straight day of advances, its longest rally in almost six years.
The blue-chip index was lifted by gains of more than 1% each in Procter & Gamble and Chevron. It is now up over 6% in 2023, compared to the S&P 500′s 18% rise.
“The Dow playing catch-up shows there is a rotation into other sectors, like health care and financials. The rally is not just tech-heavy anymore,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
Nvidia and Meta Platforms lost more than 2% each in a choppy trading session, while the S&P 500 utilities sector jumped 1.5%, followed by a 1% rise in the health-care sector index.
Netflix dipped 2.3%, down for a second straight day after the video streaming company’s quarterly results this week failed to impress.
Analysts attributed Friday’s volatile trading to the expiration of monthly options and the expected special rebalancing of the multi-trillion dollar Nasdaq 100 following the close of trading.
The S&P 500 climbed 0.03% to end at 4,536.34 points.
The Nasdaq declined 0.22% to 14,032.81 points, while Dow Jones Industrial Average rose 0.01% to 35,227.69 points.
For the week, the S&P 500 added 0.7%, the Nasdaq fell 0.6% and the Dow rose 2.1%.
The Nasdaq has rallied about 34% this year, lifted by optimism over artificial intelligence, a relatively resilient U.S. economy and expectations that the Federal Reserve’s aggressive rate hike cycle will end soon.
While the Fed is widely expected to raise interest rates by 25 basis points at its July 25-26 meeting, investors have mixed views on the central bank’s longer-term monetary policy.
American Express fell 3.9% after the credit card giant missed quarterly revenue estimates and affirmed its full-year profit forecast.
SLB declined 2.2% after the top oilfield services firm missed quarterly revenue expectations due to moderating drilling activity in North America.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.5-to-one ratio.
Volume on U.S. exchanges was relatively light, with 10.4 billion shares traded, compared to an average of 10.6 billion shares over the previous 20 sessions.
Reuters, Globe staff