TSX SHARPLY HIGHER, ON ‘RELIEF RALLY’
TORONTO • North American markets were up sharply Monday, with major indexes in both Toronto and New York posting triple-digit gains amid relief rallies on both sides of the border.
In Toronto, the S&P/TSX composite index soared 163.69 points to close at 14,466.39, easily offsetting a 103-point decline on Friday as the heavily weighted mining and energy sectors led the charge.
“That is a good way to put it — a relief rally,” said Craig Jerusalim, a portfolio manager at CIBC Asset Management.
On the TSX, where energy makes up a large portion of the index, “you’re really getting the relief rally in energy and materials after such a precipitous drop in the stocks for such a long time,” he said.
In New York, the Dow Jones industrial average shot up 241.79 points to 17,615.17 as the index broke a seven-day losing streak that saw it lose almost 380 points.
The Nasdaq was also solidly ahead, up 58.26 points at 5,101.80, while the S&P 500 advanced 26.61 points to 2,104.18.
On commodity markets, the September crude contract rose $1.09 to US$44.96 a barrel, while September natural gas added more than four cents to US$2.84 per thousand cubic feet and the December gold contract rose $10.10 to US$1,104.20 an ounce.
The Canadian dollar also strengthened, adding 0.78 of a cent to US76.92 cents in one of the loonie’s rare advances in recent weeks and one seen as unlikely to gain much traction in the near term.
With the U.S. Federal Reserve widely expected to increase interest rates in either September or December, that should put further pressure on the Canadian currency, Jerusalim said. “I’d say the fundamentals in Canada relative to U.S. suggest the Canadian dollar should stay at current levels or lower,” he said.
In corporate news, Berkshire Hathaway is acquiring aircraft component maker Precision Castparts for about US$32.4 billion in cash in what is the biggest bet in the storied career of its chairman, Warren Buffett.
The deal, valued at about US$37.2 billion including debt, far outstrips Buffett’s US$26.7-billion deal for BNSF railway in 2010. It also follows a number of other major acquisitions outside the core insurance companies on which the man known as the “Oracle of Omaha” built his investment empire.
In Canada, the founder and CEO of Gildan Activewear announced plans to sell a big block of his shares in the Montrealbased apparel manufacturer.
Glenn Chamandy has entered into a plan with a Canadian financial institution to sell up to four million of his common shares, worth about $167 million at current prices, over the next year. Gilden shares closed down $1.22 at $41.86.
You’re really getting the relief rally in energy