The Nasdaq ended lower for a second straight session on Tuesday, while much of the rest of Wall Street was mixed, as rising Treasury yields prompted investors to sell Tesla and other Big Tech names. The TSX closed with a slight gain, snapping a four-day losing streak, thanks to a rally in the energy sector.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 33 points, or 0.15%, at 21,453.77. The index is up 23.1% year to date.
The energy sector jumped 3.8% after a move by the United States and other consumer nations to release tens of millions of barrels of oil from reserves to try to cool the market fell short of expectations.
Analysts said the effect on oil prices was likely to be short-lived after years of declining investment and a strong global recovery from the COVID-19 pandemic.
Brent futures rose $2.61, or 3.3%, to settle at $82.31, while U.S. West Texas Intermediate (WTI) crude rose $1.75, or 2.3%, to settle at $78.50.
That was the biggest daily percentage gain for Brent since August and its highest close since Nov. 16.
Talk of a coordinated reserves release, a strong U.S. dollar and a potential hit to energy demand from a fourth wave of COVID-19 cases in Europe has already caused Brent prices to drop over 10% since hitting a three-year high of $86.70 on Oct. 25.
President Joe Biden’s administration said it would release 50 million barrels from the U.S. Strategic Petroleum Reserve (SPR), which will start hitting the market in mid to late December.
“The coordinated SPR release was smaller-than-expected and undoubtedly will be met by less production from OPEC+,” said Edward Moya, senior market analysts at OANDA, noting “No one would be surprised if (OPEC+) scaled down their production plans.”
The OPEC+ alliance between the Organization of the Petroleum Exporting Countries and allies including Russia has so far rebuffed repeated requests from Washington to pump more oil.
Further aiding sentiment for the TSX on Tuesday was OrganiGram, which closed up 8.9% and was the largest percentage gainer on the index after the cannabis producer posted better-than-expected fourth-quarter revenue and forecast higher revenue for the subsequent quarter.
Financials, which account for about 30% of the Toronto market’s value, extended gains for a second session, rising 0.5% and tracking U.S. bank stocks as investors priced in an early policy tightening by the Federal Reserve.
Smaller lender Laurentian Bank of Canada bucked that trend, however, falling 4.6% to its lowest close since March after saying it expects to take an impairment charge that will reduce fourth-quarter after-tax earnings by C$163 million.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.1% as gold futures fell 1.25% to $1,783.5 an ounce..
Lundin Mining Corp shares ended the day down 3.3%, further hit by lower-than-expected production guidance for 2022 through 2024, and projected costs above analysts’ estimates.
In the U.S. market, the S&P 500 growth index dipped 0.3% and the value index climbed 0.8%.
Tesla fell over 4% and Microsoft lost 0.6%, with the two companies dragging on the Nasdaq more than any other stocks. Rising interest rates tend to make growth stocks less attractive to investors.
“The market is being whipsawed by a holiday shortened week, and it’s taking its cue from the recent uptick in interest rates, giving investors additional reasons to take profits in an overvalued market,” said Sam Stovall, chief investment strategist of CFRA Research in New York.
With banks benefiting from higher interest rates, the S&P 500 banks index jumped 2%, with Goldman Sachs, JPMorgan and Bank of America all rallying.
The S&P 500 energy index soared 3% and was the best-performing sector.
An IHS Markit survey showed U.S. business activity slowed moderately in November amid labor shortages and raw material delays, but remained comfortably in expansion territory on strength in the manufacturing sector.
The Dow Jones Industrial Average rose 0.55% to end at 35,813.8 points, while the S&P 500 gained 0.17% to 4,690.7.
The Nasdaq Composite dropped 0.5% to 15,775.14.
After closing on Friday at its highest level ever, the Nasdaq has now lost about 1.8%. It remains up 22% year to date.
The CBOE volatility index briefly rose to a more than one-month high earlier on Tuesday.
The U.S. stock market will be closed on Thursday for the Thanksgiving holiday, and it finishes early on Friday.
Zoom Video Communications Inc slumped almost 15% after its third-quarter revenue growth rate slowed as demand for its video-conferencing tools eased from pandemic-fueled heights last year.
Best Buy Co Inc slid 12% after the electronics retailer forecast fourth-quarter comparable sales below expectations due to supply chain issues.
Chipmakers Micron Technology and Western Digital Corp rose 1.85% and 6.3%, respectively, after Mizuho Bank upgraded the stocks to “buy” from “neutral.”
Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored decliners. The S&P 500 posted 17 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 66 new highs and 497 new lows. Volume on U.S. exchanges was 11.3 billion shares, compared with the 11.1 billion average for the full session over the last 20 trading days.
Read more: Stocks that saw action on Tuesday - and why
Reuters, Globe staff
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.