The close: TSX at record-high close as gold miners gain
Canada’s main stock index closed at a record high on Wednesday but well off its session highs, as sharp gains for gold miners were offset by losses among energy companies and a fall in grocery retailer Empire Company Ltd .
The Toronto Stock Exchange’s S&P/TSX composite index ended up 22.56 points, or 0.14 per cent, at 16,136.59.
It had reached as high as 16,187.85 points but pared gains following news that the U.S. Federal Reserve had hiked rates but kept its 2018 rate outlook unchanged.
Half of the TSX’s 10 main groups moved higher, with advancers outnumbering decliners by a 1.5-to-1 ratio overall.
The materials group, which includes precious and base metals miners and fertilizer companies, added 2.4 per cent as gold miners jumped.
Goldcorp rose 5.6 per cent to C$15.98, Kinross Gold added 6.8 per cent to C$5.21, and Barrick Gold was up 3.3 per cent at C$18.13, as bullion bounced off five-month lows after the Fed news.
The energy group retreated 1.5 per cent, as oil prices fell with a larger-than-forecast rise in U.S. gasoline inventories and as U.S. crude output grew to record highs.
Empire Co, the parent company of the Sobeys grocery chain, fell 6 per cent to C$24.59 after reporting earnings and saying it would rebrand as string of stores in Western Canada to a discount brand as part of an ongoing restructuring.
Wall Street mixed as financials drag after Fed rate hike
The S&P 500 ended slightly lower on Wednesday pressured by the financial sector after the Federal Reserve announced a widely expected interest rate hike but kept its rate outlook for coming years even as it projected faster U.S. economic growth.
The quarter-percentage-point rise in the overnight lending rate, which marked the third hike this year, came along with an increase to the Fed’s 2018 gross domestic product growth forecast to 2.5 per cent from 2.1 per cent.
The Dow and the Nasdaq ended higher but the S&P could not sustain gains in choppy trading after the Fed statement.
The S&P was dragged lower by a late-session tumble in bank stocks, which tend to get a profit boost from higher interest rates. The financial sector’s <.SPSY> 1.3 per cent drop for the day suggested, however, that investors may have expected a more hawkish Fed.
“It’s a fairly dovish statement which is positive for risk assets,” said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia.
“Always the worry with the market is if the Fed pushes back too hard and takes away the punch bowl. It just doesn’t seem that they’re setting the table for that at all,” he said.
The Dow Jones Industrial Average <.DJI> rose 80.63 points, or 0.33 per cent, to end at 24,585.43, the S&P 500 <.SPX> lost 1.26 points, or 0.05 per cent, to 2,662.85 and the Nasdaq Composite <.IXIC> added 13.48 points, or 0.2 per cent, to 6,875.80.
The consumer staples sector <.SPLRCS> was the strongest of the S&P’s 11 sectors with a 0.5 per cent gain. The S&P utilities <.SPLRCU> sector pared gains after hitting a session high to end up 0.3 per cent.
Investors were also keeping a sharp eye on progress in the Republicans’ push for a U.S. tax law overhaul that would involve a corporate tax cut.
Shortly before the Fed news, congressional Republicans said they had reached a deal on tax legislation and U.S. President Donald Trump said he would back a corporate tax rate of 21 per cent.
“The equities market is also reacting to the possibility that Congress may have a tax plan on the president’s desk by the end of the year,” said Quincy Krosby, chief market strategist, Prudential Financial, Newark, New Jersey.
Earlier in the day a Labor Department report showed underlying consumer inflation slowed in November, possibly affecting the pace at which the Fed hikes rates.
Investors also assessed Democrat Doug Jones’ victory in a bitter fight for a U.S. Senate seat in deeply conservative Alabama on Tuesday. Some participants said his win could mean trouble for Trump’s policy agenda as it narrows the Republicans’ already slim majority in the Senate.
Advancing issues outnumbered declining ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favoured advancers.
The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 67 new highs and 46 new lows.
Volume so far on U.S. exchanges was 6.77 billion shares, compared to the 6.53 billion average for the full session over the last 20 trading days.