U.S. DATA, ECB NEWS SPUR MARKETS
Canada itself doesn’t have much sector diversification
TORONTO • North American markets were lifted Thursday by U.S. economic data, earnings reports and news that the European Central Bank may deliver more economic stimulus to combat sluggish global growth.
The Toronto Stock Exchange’s S&P/TSX index closed up 173.92 points at 13,878.11, while the loonie added 0.18 of a U.S. cent to 76.30 cents US.
In New York, the Dow Jones industrial average surged 320.55 points to 17,489.16, the broader S&P 500 index advanced 33.57 points to 2,052.51 and the Nasdaq gained 79.93 points to 4,920.05.
Ben Jang, a portfolio manager at Vancouver-based Nicola Wealth, said downward pressure on Valeant Pharmaceuticals — a heavily weighted stock on the TSX — led to smaller overall gains on the Toronto stock market relative to its counterparts south of the border.
Valeant’s market value has been slashed by more than $30 billion this week as it grapples with allegations that the pharma giant created a network of pharmacies to distribute its products so that it could avoid the scrutiny of auditors.
Shares of Valeant fell Tuesday, Wednesday and again on Thursday when it closed down $10.16 or more than six per cent at $144.05.
“We have a pretty strong breadth in the market, for moving higher, with the obvious exception being Valeant,” said Jang. “It does speak to the ... imbalance in the Canadian market. Canada itself doesn’t have much sector diversification.”
All of the sectors of the TSX closed higher, with metals and mining gaining 3.5 per cent.
In economic news, European Central Bank head Mario Draghi signalled Thursday that the bank could boost monetary stimulus at its next meeting in December.
That left some expecting that the ECB will extend its $1.2-trillion quantitative easing program, although Draghi noted that the bank is also looking at other potential measures, such as cutting one of its key interest rates.
In U.S. earnings news, e-commerce giant eBay, fast food chain McDonald’s and electronics company Texas Instruments all delivered better than expected earnings results. Shares of eBay soared nearly 14 per cent to US$27.58 on the positive news, while McDonald’s rose eight per cent to US$110.87 and Texas Instruments climbed nearly 12 per cent to close at US$58.09.
On the commodity markets, the gold contract fell $1 to US$1,166.60 an ounce, the November crude contract was up 18 cents at US$45.38 a barrel and the November contract for natural gas was down two cents at US$2.38 per thousand cubic feet.