Positive reports drive markets up
Global stock markets advanced Thursday on generally good economic reports, including Canada’s benchmark stock index which was buoyed by its financials index.
The S& P/ TSX composite index rose 53.17 points, or 0.43%, to 12,380.69. Eight of its 10 sub- indexes advanced, led by financials, up 1.46%, and technology, which rose 1.34%.
“Investors are feeling a little bit more confident in the outlook for the financials,” Michael Sprung, president of Sprung & Co. Investment Counsel Inc. in Toronto, told Bloomberg.
The price of crude oil erased its earlier gains and fell US20¢, to US$ 100.39 a barrel on Thursday in New York trading, while gold slipped US$ 5.40 to US$ 1,654.50 an ounce.
The Canadian dollar was on track in morning trading Thursday for its fourth straight gain against the U. S. greenback, but ended the day at US98.87¢, down two basis points from the previous day’s close.
While the loonie has not traded at parity since Nov. 1, its drivers “are all supportive of recent strength. Oil remains elevated at $ 101 a barrel, U. S.- Canada interest rate spreads have trended in the Canadian dollar’s favour over the last month; the U. S. economy appears more robust than previously thought; risk appetite has increased and volatility measures have all dropped lower, and the U. S. dollar has broadly weakened over the last few sessions,” said Camilla Sutton, chief currency strategist at Scotia Capital, in a note on Thursday. “Accordingly, we expect a near- term test of parity as the drivers all support Canadian dollar strength.”
Canada’s junior Venture exchange edged up by 4.15 points, or 0.27%.
A number of economic data points in the U. S. helped advance the markets on Thursday, including a positive earnings report from the Bank of America, which built on a better- than- expected report from Goldman Sachs the previous day, initial jobless claims for the previous week came in at their lowest point since 2008 and the so- called Philly Fed index gained 0.4% in December, just below estimates for a 0.5% increase.
According to data compiled by Bloomberg, of the 35 U. S. companies that reported earnings between Jan. 9 and 18, 63% have topped estimates. “There’s good news out there but at some point there are going to be more issues to deal with,” John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, told Bloomberg. “Investors have very little confidence in long- term profit growth. There’s a sense that there’s still more downward pressure on the economy than upward.”
The Dow Jones industrial average gained 45.03 points, or 0.36%, to 12,623.98 on Thursday, while the Nasdaq composite rose 18.62 points, or 0.67%, to 2,788.33.