Small Signs of hope Strengthen markets
The Toronto stock market was higher Friday amid hopes that China’s slowing growth will persuade officials to take further steps to energize the world’s secondbiggest economy. And results from banking giant JPMORgan Chase & Co. raised hopes for the second-quarter earnings reporting season.
The S&P/TSX composite index gained 89.06 points to 11,514.53 while the TSX Venture Exchange edged up 17.77 points to 1,186.96.
The Canadian dollar was up 0.39¢ to US98.56¢.
Stronger-than-expected earnings from banking giant Jpmorgan Chase helped send New York markets higher even as it massively increased the loss from a huge trading blunder in May. The biggest U.S. bank earned Us$5-billion, or $1.21 per share, for the second quarter, much higher than the 76¢ that analysts expected.
It also reported that its loss from an embarrassing trading misstep — which hit second-quarter results — has grown to Us$4.4-billion, more than double the bank’s original estimate of Us$2-billion. Its shares ran up 5.25% to US$35.82.
The Dow Jones industrial was ahead 203.82 points to 12,777.09.
The Nasdaq composite index gained 42.28 points to 2,908.47 and the S&P 500 index was ahead 22.02 points to 1,356.78.
Commodities gained even as China’s economic growth fell to a three-year low of 7.6% during the second quarter, in line with expectations.
The Chinese economy has been a major prop for the global economy still recovering from the 2008 financial collapse and recession. But there are doubts that more stimulus can pump up a Chinese economy, which is being affected by a global slowdown, just like other economies.
“Chances are they will do something sort of marginal,” said Norman Raschkowan, North American strategist at Mackenzie Financial Corp.
“But it’s not going to be anything that’s going to change the direction and the direction is that the global economy is slowing.”
The TSX energy sector climbed 1.33% as the August crude contract on the New York Mercantile Exchange gained 1.02¢ to US$87.10 a barrel. Suncor Energy Inc. rose 59¢ to $29.44 while Cenovus Energy Inc. was up 82¢ to $33.39. The base metals sector rose 1.47% as metal prices also ran ahead with copper up nine cents to US$3.50 a pound. China is the world’s biggest consumer of the metal, which is viewed as an economic proxy as it is used in so many industries. Teck Resources Ltd. climbed 45¢ to $30.54 and First Quantum Minerals Ltd. was ahead 50¢ to $17.56.