The close: TSX ends slightly higher as gold producers rise
Canada’s main stock index ended slightly higher on Monday as gold producers overcame earlier declines and helped offset energy shares dragged lower by the price of oil.
The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed up 26.98 points, or 0.17 per cent, at 15,604.79.
Gold stocks rose 1.1 per cent, led by a 5.1-per-cent jump from Centerra Gold Inc. Barrick Gold Corp. rose 3 per cent, while Goldcorp Inc. increased 2.6 per cent.
Energy stocks fell 0.4 per cent on the day, including a 3.9-per-cent drop by Paramount Resources Ltd and a 2.1-per-cent decline by Crescent Point Energy Corp.
Enerplus Corp, Canadian Natural Resources Ltd., Vermilion Energy Inc., Imperial Oil Ltd. and Husky Energy Inc. all fell 0.7 per cent.
Oil prices regained some ground on Monday afternoon but remained down as investors grappled with persisting concerns about rising U.S. output, while demand for U.S. Treasuries stayed strong despite increased supply.
Crude prices rose on Friday after the U.S. economy added the biggest number of jobs in more than 1-1/2 years in February. But U.S. crude fell as much as 2.21 per cent on Monday, to $60.67 per barrel, before bouncing back to $61.35, down 1.11 per cent.
“It just looked like some profit taking,” said Jim Ritterbusch, president of energy advisory firm Ritterbusch & Associates.
Brent was last at $64.96, down 0.81 per cent on the day.
Energy investors are weighing increased U.S. supply against the likelihood that the Organization of the Petroleum Exporting Countries will maintain supply cuts that have been in effect more than a year.
“The market continues to flip back and forth on the idea that increased global demand and a production cut is going to support prices … but U.S. production, and North American production levels in general, is going to negate a lot of the impact of that,” said Gene McGillian, director of market research at Tradition Energy.
Friday’s strong U.S. payroll data, which showed a hefty 313,000 rise in jobs but tempered growth in hourly earnings, supported Treasuries in Monday trade.
Benchmark 10-year notes last rose 8/32 in price to yield 2.8663 per cent. That is not far off the 2.957-per-cent yield on Feb. 21, the highest since the instrument yielded more than 3 per cent in January 2014.
The Treasury on Monday sold $28-billion of three-year notes and $21-billion of the 10-year notes, in what analyst George Goncalves called an “on-the-screws type auction.”
Increased supply did not quell demand for the notes, a positive sign for the heavy issuance expected in the year ahead.
“Nothing really stood out,” said Goncalves, head of U.S. rates strategy at Nomura Securities International in New York. “You can consider that a good thing, given this year will see more and more Treasuries issued.”
Last week’s U.S. jobs data, as well as an easing of fears of a global trade war, boosted stocks across many parts of the world.
MSCI’s world equity index hit a two-week high, while Hong Kong’s Hang Seng Index closed up 1.93 per cent.
Emerging market stocks rose 1.29 per cent.
The Nasdaq rose on Monday as tech stocks climbed, but the S&P 500 ended lower and the Dow dragged as industrials were weighed down by tariffs signed into law last week by President Donald Trump.
The Dow Jones Industrial Average fell 157.26 points, or 0.62 per cent, to 25,178.48, the S&P 500 lost 3.55 points, or 0.13 per cent, to 2,783.02 and the Nasdaq Composite added 27.52 points, or 0.36 per cent, to 7,588.33.
Shares of companies such as Boeing Co, down 2.9 per cent, and Caterpillar Inc, down 2.4 per cent, have been under pressure as Mr. Trump’s protectionist stance on steel and aluminum imports could increase costs and hamper sales abroad. Boeing and Caterpillar were the biggest decliners on the Dow.
Mr. Trump last week softened his stance on tariffs by exempting Canada and Mexico, but negotiations are ongoing as the European Union and Japan also seek exemptions.
“The big multinational, industrial companies of the world are all taking a hit on the concern that they will be the targets of reprisal sanctions,” said Robert Phipps, a director at Per Stirling Capital Management in Austin.
Those losses were tempered by a CNBC report that Larry Kudlow is the leading candidate to replace White House economic advisor Gary Cohn, Mr. Phipps said. Mr. Kudlow, like Mr. Cohn, is seen by some investors as a greater proponent of free trade than Mr. Trump’s other advisors.
“That offered some comfort to the markets,” said Mr. Phipps. “However, it’s not enough of an offset to protect the companies that are susceptible to retaliation in a trade war.”
Wall Street’s main indexes closed up nearly 2 per cent on Friday on the strength of the jobs report, and have nearly reversed declines in recent weeks when investors feared that higher wages might lead to price pressures.
“We’re seeing some positive follow-through, but it would not surprise me to see some profit-taking coming off a very powerful performance on Friday,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, N.J..
In currencies, investors’ appetite for riskier bets caused the U.S. dollar to inch down. The dollar index fell 0.24 percent, with the euro up 0.26 per cent at $1.2337.
The Japanese yen strengthened 0.41 per cent versus the greenback to 106.35 per dollar, while sterling was last trading at $1.3908, up 0.42 per cent on the day.