U.S. Bank earnings help boost markets
• Strong economic data and solid bank earnings from the United States helped push the Toronto stock market higher Thursday.
The S&P/TSX composite index was up 60.08 points to 12,628.85, led by gains in energy stocks and financials, as the Toronto market advanced for three of the past four sessions.
“(People are) looking at the economy and saying, there isn’t especially great news, but there isn’t bad news either,” said Sadiq Adatia, chief investment officer at Sun Life Global Investment.
“And so you have seen the market start to pick up and it’s more broad based than it was before.”
The Canadian dollar was ahead 0.35 of a cent to US96.38¢. It slid almost half a U.S. cent Wednesday after the Bank of Canada said it was in no hurry to raise its key interest rate from 1%, where it has been for almost three years.
U.S. indexes were higher and the Dow industrials and S&P 500 closed at record highs as investment bank Morgan Stanley beat expectations and a major manufacturing index came in much better than expected.
The Dow Jones industrials moved 78.02 points higher to 15,548.54, the Nasdaq was up 1.28 points to 3611.28 and the S&P 500 index gained 8.46 points to 1689.37.
The Philadelphia Fed’s manufacturing survey in July surged to its highest level in more than three years, coming in at 19.8, up from 12.5 in June. The results were much higher than the reading of 10 that economists had expected.
Also, the New York-based Conference Board said its leading economic index was unchanged in June. It reported that the economy is seeing “positive but moderate” growth, and continued expansion is expected this year.
Meanwhile, Morgan Stanley earned US$ 898-million after excluding the benefit of an accounting gain, a leap from US$337million a year earlier. Earnings ex-items were US45¢ a share, US2¢ better than expectations and its shares were ahead per cent 4.37%.
“I’ve been strongly bullish on U.S. banks because of the housing market improving, the economy improving,” Mr. Adatia added. “We’ve seen extremely positive results from the U.S. banks. And that will impact Canadian banks positively.”
On Thursday, advancers were led by a 1.34% rise in the financials sector. Manulife Financial was ahead 17¢ to $18.25 after hitting a new 52-week high of $18.36.
Two of Canada’s biggest banks also racked up record highs. Royal Bank was up 98¢ to $64.78, 29¢ above its previous high on Feb. 29. Toronto-Dominion Bank rose $1.32 to $87.48. Its previous record closing price was $86.40 on March 30, 2011.
The energy sector gained 0.76% as benchmark crude for August delivery was up US$1.56 at US$108.04 a barrel on the New York Mercantile Exchange after gaining US48¢ on Wednesday.
Despite cooling economic growth in China, the price of oil was underpinned by another sizeable decline in U.S. oil supplies. U.S. crude inventories fell by 6.9 million barrels last week, bringing the threeweek decline to 27.1 million barrels.