Canada’s main stock index rose for a third day on Thursday, as optimism that the Omicron variant of the coronavirus was less severe than feared bolstered commodity prices and data showed that the domestic economy likely grew in November.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 148.88 points, or 0.7%, at 21,218.93, adding to gains on Tuesday and Wednesday and its highest closing level since Nov. 25.
Wall Street’s main indexes also rose after more encouraging developments about the impact of the Omicron variant.
“People are starting to realize the Omicron variant is not as bad as some of the other waves we’ve had,” said Gregory Taylor, portfolio manager at Purpose Investments.
“So we’re starting to see recovery in the commodities and investor sentiment, which really has been hurt earlier in the month.”
The risk of needing to stay in hospital for patients with the Omicron variant is 40% to 45% lower than for patients with the Delta variant, according to research by London’s Imperial College published on Wednesday.
Also welcome was a preliminary estimate showing that the Canadian economy grew 0.3% in November, its sixth consecutive month of expansion.
“Canada’s economy was doing rather well at least in the pre-Omicron world,” Derek Holt, head of capital markets economics at Scotiabank, said in a note.
The heavily-weighted financial services sector advanced 0.8%, helped by a 13.4% jump in the shares of ECN Capital Corp . Technology was up 1.5%.
U.S. crude oil futures settled 1.4% higher at $73.79 a barrel, helping energy shares hang on to much of this week’s rally.
The materials group, which includes precious and base metals miners and fertilizer companies, added 0.5%.
Wall Street’s main indexes posted solid gains for a third straight session on Thursday, with the S&P 500 marking a record-high close, as encouraging developments gave investors more ease about the economic impact of the Omicron coronavirus variant.
U.S. stocks also ended the holiday-shortened week on a positive note, lifting sentiment heading into Christmas. Gains were broad among S&P 500 sectors, led by consumer discretionary and industrials, which both rose about 1.2%.
Vaccine makers AstraZeneca Plc and Novavax Inc said their shots protected against Omicron as UK data suggested it may cause proportionally fewer hospital cases than the Delta variant, though public health experts warned the battle against COVID-19 was far from over.
The arrival of Omicron has helped ratchet up market volatility for much of the last month of 2021, which has been a strong year for equities.
“There was a lot of negative sentiment coming into the final part of the year, and investors have likely continued to see pretty strong economic growth and pretty positive developments as it relates to healthcare innovation around COVID and that is putting in a bit of a bid into equities and causing investors to look to allocate capital as they close out the year,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management.
The Dow Jones Industrial Average rose 196.67 points, or 0.55%, to 35,950.56, the S&P 500 gained 29.23 points, or 0.62%, to 4,725.79 and the Nasdaq Composite added 131.48 points, or 0.85%, to 15,653.37.
Defensive sectors, which have mostly outperformed in December, generally lagged on Thursday. The real estate sector fell 0.4%.
The S&P 500 has gained for three days, after falling in the three prior sessions.
“People are seeing the strength on Tuesday and Wednesday and all of a sudden everybody is more optimistic again,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
For the week, the S&P 500 rose 2.3%, the Dow gained about 1.7% and the Nasdaq climbed 3.2%.
Trading volumes were expected to be thinner than usual ahead of the Christmas and New Year holidays. The stock market will be closed on Friday in observance of the Christmas holiday.
In another medical development against the pandemic, the United States authorized Merck & Co’s antiviral pill for COVID-19 for certain high-risk adult patients, a day after giving a broader go-ahead to a similar but more effective treatment from Pfizer Inc. Merck shares fell 0.6%, while Pfizer dropped 1.4%.
The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week as the labor market tightens, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021.
Tesla Inc shares rose 5.8%, gaining sharply for a second day after Chief Executive Elon Musk said on Wednesday he was “almost done” with his stock sales after selling over $15 billion worth since early November.
The S&P 500 is up about 26% so far this year. Still, the environment for equities could be changing heading into next year as the Federal Reserve is expected to begin raising interest rates in 2022.
Reuters
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.