U.S. stocks advanced on Thursday, as ongoing negotiations toward a peaceful resolution to the six-week Middle East conflict helped ease worries over the fragile U.S.-Iran truce. All three major U.S. stock indexes gained ground after rebounding from an earlier dip as Israel sought talks with Lebanon.
Canada’s main index, however, struggled to get out of the red and ended lower for the first time in seven sessions. Some of the more heavier-weighted names in the S&P/TSX Composite Index, including Shopify and Telus, were down sharply. And energy stocks struggled, with oil prices seesawing throughout the session, as markets waited for Iran to reopen the Strait of Hormuz.
“There’s an increasing recognition that this administration is more bark than bite, and willing to make grand statements about world destruction,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “From an investor’s perspective, you have to decide whether to ignore it all or just cash in and sit it out the next two years.”
In two sessions, the S&P 500 has moved back above its 100-day and 200-day moving averages, two key technical levels.
The CBOE Market Volatility Index, called the “fear index,” dipped to its lowest point since the onset of the war.
The U.S. Commerce Department issued its GDP and PCE reports, which showed the economy grew at a slower-than-expected pace in the fourth quarter, while consumer prices remain elevated.
Minutes from the U.S. Federal Reserve’s most recent monetary meeting showed policymakers are increasingly eyeing potential interest rate hikes to counter the inflationary impact of a prolonged Iran war.
The Dow Jones Industrial Average rose 275.88 points, or 0.58%, to 48,185.80, the S&P 500 gained 41.85 points, or 0.62%, to 6,824.66 and the Nasdaq Composite gained 187.42 points, or 0.83%, to 22,822.42.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended down 142.86 points, or 0.4%, at 33,477.71, after six straight days of gains.
The TSX technology sector fell 2.1%, with shares of e-commerce company Shopify Inc down 6.5%.
BlackBerry Ltd was a bright spot. Its shares added 7.4% after the software company forecast first-quarter revenue above estimates.
Energy was down 1.6% even as the price of oil settled 3.7% higher at US$97.87 a barrel. Still, energy has advanced nearly 33% since the start of the year and was vulnerable to some profit-taking.
Shares in Telus ended down 6.8% after an analyst downgrade.
Consumer staples lost 2.3% in Toronto and the materials group, which includes metal mining shares, ended 0.6% lower. Three of the 10 major sectors ended higher, including heavily weighted financials, which added 0.8%.
On Wall Street, of the 11 major sectors in the S&P 500, energy shares dropped the most, while consumer discretionary registered the biggest percentage gain. Consumer discretionary stocks got a boost after Amazon.com’s CEO Andy Jassy said its artificial intelligence services at its cloud-computing unit are generating annualized revenue of more than US$15 billion. Amazon’s shares rose 5.6%.
Software stocks were clear underperformers on the day, sliding 2.2%, while retail and chips outperformed, rising 4.1% and 2.1%, respectively.
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Constellation Brands jumped 8.5% after the company posted a smaller-than-expected drop in fourth-quarter sales. Applied Digital shares dropped 8% after the data center operator’s third-quarter net loss widened from a year earlier.
Advancing issues outnumbered decliners by a 1.99-to-1 ratio on the NYSE. There were 254 new highs and 83 new lows on the NYSE. On the Nasdaq, 2,651 stocks rose and 2,029 fell as advancing issues outnumbered decliners by a 1.31-to-1 ratio. The S&P 500 posted 44 new 52-week highs and 19 new lows while the Nasdaq Composite recorded 158 new highs and 135 new lows.
Volume on U.S. exchanges was 17 billion shares, compared with the 19.38 billion average for the full session over the last 20 trading days.
Reuters, Globe staff