DOW LIFTS 259 POINTS, TSX TAKES BACK LOSSES
TORONTO • The Toronto stock market rebounded on Thursday as traders took back some of the losses from earlier in the week.
The S&P/TSX composite index rose 31.52 points to close at 14,770.72, boosted by financial stocks and the metal and mining sector.
Financials stocks were broadly higher, with the sector rising 0.8%. Both Manulife Financial and Toronto-Dominion Bank were among the biggest TSX traders.
Meanwhile, the metals and mining sector rose 1.5% with March copper up US5.3¢ at US$2.66 a pound. April gold bullion closed ahead US$1.40 at US$1,152.10 an ounce.
“We have entered a period where we should expect greater volatility and less of a magnitude of returns than we are used to,” said Kash Pashootan, vice-president of First Avenue Advisory in Ottawa.
“I feel it’s healthy. If we were not seeing that volatility, and we continued to see markets gain at the same robust nature as we have in the past five years, that’s when I would start to be concerned.”
The Canadian dollar moved ahead US0.36¢ to US78.72¢ as the U.S. greenback eased off its relentless climb against key international currencies.
The move came as the Royal Bank of Canada downgraded its latest economic forecast for 2015 after a sharp drop in energy prices.
The bank projects Canada’s real gross domestic product to grow by 2.4% this year — a reduction of 0.3 percentage points from its forecast issued last December. RBC said while the drop in energy prices is a negative for the oil and gas sector, much of the weakness will be offset by stronger consumer spending and exports.
On the commodity markets, the April crude contract ended near a six-week low, falling US$1.12 to US$47.05 a barrel on the New York Mercantile Exchange, as the TSX energy sector dropped 1.5%.
“Our view is the Canadian economy will be sluggish for the next three years at best, potentially longer,” Mr. Pashootan said.
“This fall in oil prices couldn’t have come at a worse time for the Canadian economy because it further compounds the challenge from a job-loss and consumer-confidence perspective.”
In the U.S., traders changed their tune on expectations surrounding the Federal Reserve’s policy on interest rates. A weak retail sales report issued Thursday morning appeared to push expectations on a rate hike until later in the year.
The shift in sentiment helped the Dow Jones industrial average jump 259.83 points to 17,895.22, Nasdaq climbed 43.35 points to 4,893.29 while the S&P 500 index edged up 25.71 points to 2,065.95.
In corporate news, Empire Co. Ltd., parent of the Sobey’s grocery chain, earned $123.6 million for the quarter. Sales slipped to $5.94 billion compared with $6 billion. Empire shares dropped 95¢ to $90.
Transat AT Inc. said it’s aiming for $100 million of cost savings and margin improvements by 2017. Part of the plan includes saving $45 million in 2015. The tour operator posted a deeper net loss of $64.3 million in the first quarter compared to $25.6 million a year earlier. Transat shares were down 60¢ to $6.10.