Canada’s main stock index rose on Friday to its highest level in more than two weeks as commodity-linked shares advanced, although an escalating Russia-Ukraine crisis kept sentiment in check.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 152.02 points, or 0.7%, at 21,402.43, its highest closing level since Feb. 15. For the week, it was up 1.4%, adding to the previous week’s advance.
In contrast, Wall Street ended lower as fighting in Ukraine, where Russian forces have seized the largest nuclear power plant in Europe, overshadowed a blowout U.S. jobs report.
“There’s a balancing act going on right now,” said Philip Petursson, chief investment strategist at IG Wealth Management. “We have the geopolitical tensions that are creating a risk-off environment in the equity market, yet the commodities segment of the market is benefiting.”
The energy sector climbed 3.5% as oil prices jumped to the highest since September 2008 on the disruption of Russian exports. U.S. crude prices settled 7.4% higher at $115.58 a barrel.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 3.2%, hitting its highest level since early 2012, as copper and gold prices rose. Gold was up 1.75% at $1,969.06 an ounce.
Together, the energy and materials sectors have a 26% weighting on the Toronto market.
Technology fell 3.6%, with Shopify Inc posting its lowest close since April 2020 as it ended 5.9% lower.
Shares of retailer Canadian Tire Corp Ltd declined 1.2%. The company said it will temporarily pause the Helly Hansen brand’s operations in Russia.
Wall Street ended lower on Friday as the war in Ukraine overshadowed an acceleration in U.S. jobs growth last month that pointed to strength in the economy.
Most of the 11 major S&P sector indexes declined, with financials leading the way with a 2% drop as investors worried about how the West’s sanctions against Moscow may affect the international financial system.
The S&P 500 banks index fell 3.35%, bringing its loss for the week to nearly 9%, its worst weekly decline since June 2020.
Equities globally were weaker, with safe-haven assets in demand after Russian forces seized Europe’s biggest nuclear power plant in what Washington called a reckless assault that risked catastrophe.
The Labor Department’s closely watched employment report showed jobs grew by a more than expected 678,000 last month and that the unemployment rate fell to 3.8%, the lowest since February 2020.
“Three or four weeks ago, we would have thought that this is an incredibly important number. But given the backdrop and the overall events that are happening in Europe, it’s just not,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte.
“The potential for escalation in the hot war, the potential for a growth impact in Europe and more broadly, and knock-on effects on the commodity channel and inflation are taking up all of investors’ time and energy,” Hill said.
Amazon.com Inc, Apple Inc, Google owner-Alphabet Inc and Microsoft Corp all lost more than 1%.
The crisis in Ukraine boosted energy stocks as crude prices and other commodities rallied on the back of sanctions against Russia, a major oil producer. The S&P 500 energy sector jumped 2.85% and gained about 9% for the week.
Richly valued growth stocks have faced the brunt of the recent selloff, with the S&P 500 growth index down 1.3% on Friday. The value index declined 0.3%.
The Dow Jones Industrial Average fell 0.53% to end at 33,614.8 points, while the S&P 500 lost 0.79% to 4,328.87.
The Nasdaq Composite dropped 1.66% to 13,313.44.
For the week, the S&P 500 and Dow both fell 1.3%, while the Nasdaq gave up 2.8%.
Federal Reserve Chair Jerome Powell said this week he would support a 25-basis-point interest rate increase at the central bank’s March 15-16 policy meeting and would be “prepared to move more aggressively” later if inflation does not abate as fast as expected.
Soaring commodity prices have raised fears of even greater inflation, which could prompt the Fed to hike interest rates more aggressively.
Shares of WW International, formerly Weight Watchers, dropped over 8% after the Federal Trade Commission said the company “illegally” collected personal information from children without parental permission.
Declining issues outnumbered advancing ones on the NYSE by a 2.12-to-1 ratio; on Nasdaq, a 2.70-to-1 ratio favored decliners.
The S&P 500 posted 38 new 52-week highs and 27 new lows; the Nasdaq Composite recorded 44 new highs and 406 new lows.
Volume on U.S. exchanges was 13.9 billion shares, compared to a 20-day average of 12.6 billion, according to Refinitiv data.
Reuters
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