Rising oil price spurs Toronto market
The Toronto stock market closed with a solid gain on Tuesday as crude oil prices settled at their highest level of the year. The S&P/TSX composite index rose 88.19 points to 15,188.84, while the Canadian dollar fell 0.17 of a cent (U.S.) to 79.97 cents.
Leading the market were TSX energy stocks, with the sector rising 1.9 per cent as the price of crude continued its climb for a second straight session. The May crude contract settled $1.84 higher at $53.98 a barrel, a level it last hit on Dec. 30, 2014. The commodity was on the upswing ahead of the latest crude inventory report due Wednesday, which is expected to show a positive combination of lower output and higher demand.
Companies in the energy sector have been hit disproportionately hard in recent months as the price of oil pulled back, said Sid Mokhtari, a market technician at CIBC World Markets.
He believes investors may be taking another look at stock values while maintaining caution over the direction of future oil prices.
“These things did get very deeply oversold,” he said of Canadian energy companies. “But it is still questionable how high oil could go on the upside.”
Gold prices retreated from a sevenweek high as the June bullion contract dropped $8 to $1,210.60 an ounce, giving back a chunk of its al- most $18 advance on Monday.
New York markets pulled back late in the session as traders gave up a rally that drove a sharp rise earlier in the day.
The Dow Jones industrial average closed down 5.43 points at 17,875.42 and the Nasdaq fell 7.09 points to 4,910.23. The S&P 500 was down 4.29 points at 2,076.33.
A U.S. Labor Department report offered some reason for optimism in the direction of the jobs market after a dismal report on Friday which showed employers added a mere 126,000 jobs in March. The latest report said job openings jumped 3.4 per cent in February to 5.1 million, which suggested that employers are ready to hire in larger numbers this spring.
On Wednesday, U.S. earnings season kicks off after markets close with first-quarter results from Alcoa. Expectations for the quarter generally are muted and bad news could make for turbulent trading.
Also on the calendar are minutes from the latest meeting of the U.S. Federal Open Market Committee in March.
The details will provide an update on how the recent policy meeting viewed interest rate hikes.
In corporate news, FedEx said it reached an agreement to take over TNT Express, one of Europe’s largest delivery companies, for 4.4 billion euros, or $4.8 billion. The companies expect to complete the agreement in the first half of 2016, pending shareholder approval.