Financials sector boosts North American stocks

North American stock markets finished Friday on a positive note, led by financial companies as U.S. President Donald Trump prepared to scale back regulations affecting the sector.

Toronto’s S&P/TSX composite index climbed 77.28 points at 15,476.39, with the financials sector up 0.8 per cent.

Base metals stocks on the TSX retreated 3.19 per cent, followed by energy companies, which were down 0.10 per cent.

South of the border, the Dow Jones industrial average added 186.55 points at 20,071.46 and the S&P 500 climbed 16.57 points at 2,297.42. The Nasdaq composite gained 30.57 points at 5,666.77, a new all-time high.

Michael Currie, a vicepresident and investment adviser at TD Wealth, says the financials sector benefited from Trump’s first steps aimed at loosening regulations affecting the industry.

Trump signed an executive order directing the Treasury Secretary to explore potential changes to the Dodd-Frank law, which was implemented after the global financial crisis of 2008-09.

“The most regulated sector of the market is financials, so every time we hear about regulations being cut it tends to favour them the most,” Currie said.

U.S. stocks also got a boost from a better-than-expected jobs report. The U.S. Labor Department reported that employers added 227,000 jobs last month - more than last year’s average monthly gain of 187,000.

“The market reacted quite positively,” Currie said.

“There were many more jobs than predicted. Also we know the president has put a hiring freeze on federal jobs, so the jobs are being created by the private sector instead of the public sector, which is what the market likes to see.”

On the flip side, however, the U.S. unemployment rate rose to 4.8 per cent, compared to 4.7 per cent in December.

The Canadian dollar was at 76.76 cents US, down 0.04 of a U.S. cent from Thursday’s close.

“It’s been trading in the 70s for a while,” Currie said.

“As we get closer to 80, Canada starts to get a little bit more worried. It makes us a little less competitive when we’re up close to the 80-cent mark.”

In commodities news, the March crude contract added 29 cents at US$53.83 per barrel and March natural gas lost 12 cents at US$3.06 per mmBTU.

The April gold contract gained $1.40 at US$1,220.80 an ounce and March copper fell seven cents at US$2.62 a pound.