Markets rebound on industrials
TORONTO — The industrials sector lead a broad rally in Canada’s main stock index Tuesday that saw it join gains of more than one per cent in major U.S. markets.
The gains across North American markets came after a rocky stretch in recent weeks as investors digest a changing reality for equity, Candice Bangsund, portfolio manager for Fiera Capital.
“We’re in sort of a changing, evolving landscape here where we’re not going to have central banks backstopping the markets for the foreseeable future.”
“This is something that markets are definitely not used to,” she said.
The easing of support as central banks raise rates comes as companies begin to warn of rising labour and material costs and the impacts of tariffs, which, combined with trade fears with China, have rattled markets in recent weeks.
“We are in correction territory. October has been the worst month since the financial crisis,” said Bangsund.
Tuesday showed some respite from the gyrations as company profits continue to generally beat expectations and some investors see opportunity.
“We’re seeing a sense of stability come into the marketplace here,” said Candice Bangsund, portfolio manager for Fiera Capital.
“Looks like equity markets have found their footing after what’s been a fairly volatile few weeks in the markets, with relatively little in the way of any economic or even earnings developments.”
The S&P/TSX composite index closed up 172.75 points or 1.17 per cent at 14,894.50 as all major indexes outside of utilities rose. The index hit an intraday high of 14,899.20 and traded 264 million shares.
The industrials index led gains with a 2.75 per cent climb, while the utilities index was down just over one per cent.
In New York, the Dow Jones industrial average closed up 431.72 points at 24,874.64. The S&P 500 index closed up 41.38 points at 2,682.63, while the Nasdaq composite was up 111.36 points at 7,161.65.
The respite from falling markets Tuesday doesn’t mean anything has changed in the overall market, said Bangsund.
“We’re going to have to get used to this volatility though. Tomorrow could be a different story.”
The Canadian dollar averaged 76.14 cents US, down 0.09 of a US cent from Monday.
The December crude contract closed down 86 cents at US$66.18 per barrel and the December natural gas contract ended down a penny at US$3.19 per mmBTU.
The December gold contract ended down US$2.30 at US$1,225.30 an ounce and the December copper contract closed down eight cents at US$2.66 a pound.
Meanwhile, Facebook Inc. reported third-quarter net income of $5.14 billion. The Menlo Park, California-based company said it had net income of $1.76 per share.
The results surpassed Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of $1.46 per share. The social media company posted revenue of $13.73 billion in the period, which did not meet Street forecasts. Fourteen analysts surveyed by Zacks expected $13.81 billion.
Facebook shares have decreased 17 per cent since the beginning of the year, while the Standard & Poor’s 500 index has stayed nearly flat. In the final minutes of trading on Tuesday, shares hit $146.11, a decrease of 18 per cent in the last 12 months.
EBay Inc. reported third-quarter profit of $721 million. The San Jose, Californiabased company said it had net income of 73 cents per share. Earnings, adjusted for one-time gains and costs, were 56 cents per share.