North Amer­i­can mar­kets pull out of five-day skid

Health-care sec­tor leads re­bound on TSX

Winnipeg Free Press - - BUSINESS - ROSS MAROWITS

ORONTO — Canada’s main stock in­dex snapped a five-day los­ing streak on Fri­day, while U.S. mar­kets made up some of the lost ground on a re­cov­ery in tech stocks.

De­spite a strong U.S. econ­omy, many be­lieve in­vestors were spooked by the prospect of a se­ries of in­ter­est rate hikes, said Al­lan Small, se­nior in­vest­ment ad­viser with Hol­lisWealth.

“I think this is one huge over­re­ac­tion,” he said of the re­cent sell-off.

“It’s go­ing to take a bunch of trad­ing days for us to make back what the losses have added up to over the past few days.”

The S&P/TSX com­pos­ite in­dex closed up

97.16 points to 15,414.29 af­ter shed­ding 754.92 points be­tween Oct. 4 and Thurs­day. The mar­ket hit a high of 15,470.88 on the day with 289.3 mil­lion shares traded.

The health-care sec­tor led, ris­ing 4.24 per cent with a big push from cannabis pro­ducer Canopy Growth Corp. Ten of the mar­ket’s 13 sec­tors in­creased, while gold, ma­te­ri­als and base met­als were down slightly.

The lat­est sell-off was smaller than the one ear­lier this year and Small said it could have been af­fected by sea­son­al­ity, with mar­kets typ­i­cally fall­ing in Oc­to­ber, and com­puter al­go­rithms that trig­gered sell­ing in af­ter­noon ses­sions.

“I think that this again will sub­side and I think the mar­ket will bounce higher. Hope­fully earn­ings sea­son will be the cat­a­lyst for that,” he said.

Still, Small ex­pects com­pa­nies will be­gin to note that tar­iffs are start­ing to eat into cor­po­rate prof­its.

In New York, the Dow Jones in­dus­trial av­er­age gained 287.16 points to 25,339.99 af­ter shed­ding

1,377.74 points in the last two days. The S&P 500

Tin­dex was up 38.76 points at 2,767.13, while the Nas­daq com­pos­ite rose 167.83 points to 7,496.89. Big tech­nol­ogy and con­sumer-fo­cused com­pa­nies led the re­cov­ery Fri­day. Long­time favourites of many in­vestors, they had plunged in the last few days.

A ma­jor fac­tor cited by mar­ket watch­ers for the pull­back was a sharp in­crease in U.S. in­ter­est rates, which can slow the econ­omy and make bonds more at­trac­tive to in­vestors rel­a­tive to stocks.

Ap­ple climbed 3.6 per cent to US$222.11 and Mi­crosoft gained 3.5 per cent to US$109.57. Ama­zon jumped four per cent to US$1,788.41.

Those are the three most valu­able com­pa­nies in the U.S., and they suf­fered star­tling de­clines the last few days: on Wed­nes­day each took its big­gest loss in more than two years. That made for a dra­matic end to three months of calm on the U.S. mar­ket.

Small said peo­ple have got­ten too ac­cus­tomed to see­ing their port­fo­lios con­sis­tently rise and were lulled into a false sense of se­cu­rity.

“I think in­vestors in my opin­ion were start­ing to get a lit­tle bit greedy. They weren’t happy with the six, seven, eight, nine per cent rate of re­turn. They were chas­ing the hot in­vest­ment, the hot tech­nol­ogy stock, or cannabis stock.”

The Cana­dian dol­lar traded at an av­er­age of 76.74 cents US com­pared with an av­er­age of 76.70 cents US on Thurs­day.

The Novem­ber crude con­tract was up 37 cents at US$71.34 per bar­rel and the Novem­ber nat­u­ral gas con­tract was down 6.1 cents at US$3.16 per mmBTU.

The De­cem­ber gold con­tract was down US$5.60 at US$1,222 an ounce and the De­cem­ber cop­per con­tract was up 0.25 of a cent at US$2.80 a pound.

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