Markets close higher as oil slides again on COVID fears

TORONTO — North American stock markets rebounded Friday after a difficult week, though the price of oil continued its slide on concerns over the COVID-19 Delta variant.

Canada’s main stock index ended a streak of six straight sessions of losses Friday. The S&P/TSX composite index was up 123.66 points at 20339.02.

In New York, the Dow Jones industrial average was up 225.96 points at 35120.08. The S&P 500 index was up 35.87 points at 4441.67, while the Nasdaq composite was up 172.87 points at 14714.66.

The improving sentiment was largely due to comments made Friday by Dallas Federal Reserve president Robert Kaplan, said Manulife Investment Management chief investment strategist Philip Peturrson.

Kaplan’s comments — suggesting he might not be as eager as he once was to see the U.S. Central Bank begin scaling back its bond-buying program — were seen as good news by the equity markets, Peturrson said. The expected tapering of pandemic emergency relief programs by the U.S. Federal Reserve had been making investors jittery all week, Peturrson said.

“Largely, the week was driven by uncertainty,” Peturrson said. “Uncertainty around the direction of economic strength, uncertainty around the potential for taper. And today we had a bit more clarity.”

However, while stock indexes improved Friday, oil continued its slide — falling to its lowest level since May. The October crude oil contract was down $1.36 US at $62.14 US per barrel.

Oil is extremely vulnerable to negative headlines about COVID-19, as public health lockdowns anywhere on the globe have a significant impact on fuel demand. While oil had risen to a sevenyear high in July as countries loosened public health restrictions, this week’s news about surging cases of the Delta variant in North America and around the world is dragging it down again, Peturrson said.

“Energy had a great run, from the start of the year up until really a couple of weeks ago,” he said. “Now we’re just seeing a bit of a correction.”

The September natural gas contract was up two cents at $3.85 US per mmBTU.

The December gold contract was up 90 cents at $1,784.00 US an ounce, and the September copper contract was up almost 10 cents at $4.14 US a pound.