Canada’s commodity-linked main stock index rose to a record high on Friday as oil extended this week’s sharp gains and a blowout U.S. employment report allayed concern about a slowdown in the American economy.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 194.33 points, or 0.8%, at 24,162.83, moving past the record closing high it posted on Tuesday.
For the week, the index added 0.9%, its fourth straight weekly advance.
The major U.S. stock indexes also moved higher on Friday as the U.S. economy added more jobs than expected in September.
“It was a strong report across the board, showcasing that the U.S. economy remains resilient in the face of worries about an economic slowdown,” said Angelo Kourkafas, a senior investment strategist at Edward Jones. “That’s clearly positive for stocks.”
Technology rose 2%, helped by a 5.6% gain for the shares of e-commerce company Shopify Inc.
Going forward, investors could increase participation in cyclical sectors, helping the Toronto market, Kourkafas said.
Combined, the economically sensitive financials, materials and energy sectors account for 63% of the TSX’s weighting.
Financials ended up 0.9% on Friday, while energy added 1.3% and was up 8.5% for the week, its biggest weekly advance since October 2022.
The price of oil rose for a fourth consecutive session, settling 0.9% higher at $74.38 a barrel, as investors braced for a potential Israeli strike on Iranian energy infrastructure.
U.S.-based Coeur Mining will buy SilverCrest Metals Inc for about $1.7 billion, the companies said, as miners look to secure reserves amid surging demand for silver. Shares of SilverCrest jumped 9.7%.
The Dow posted a record closing high on Friday and the Nasdaq ended with a more than 1% gain as a stronger-than-expected jobs report reassured investors who had worried the economy may be getting too weak.
U.S. job gains increased
in September by the most in six months, and the unemployment rate fell to 4.1%, the report showed.
The data “basically tells us economic activity in the fourth quarter is likely to remain at a solid pace,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“It’s a good surprise, but I also think it may now slow the pace of rate cuts.”
Traders further reduced bets on a 50-basis-point reduction at the Federal Reserve’s Nov. 6-7 meeting. Traders are now pricing in just an 8% chance of a 50-bps rate cut, down from around 31% earlier on Friday, the CME Group’s FedWatch Tool showed.
The Fed kicked off a monetary easing cycle last month with a 50 basis point rate cut.
Small caps and financials outperformed, with the Russell 2000 index up 1.5% and the S&P 500 financials index up 1.6%.
Spirit Airlines shares dropped 24.6% while other airlines jumped after a report showed Spirit was in talks with bondholders about a potential bankruptcy filing. Frontier Group shot up 16.4%, while United Airlines rose 6.5% and Delta Air Lines climbed 3.8%.
The Dow Jones Industrial Average rose 341.16 points, or 0.81%, to 42,352.75, the S&P 500 gained 51.13 points, or 0.90%, to 5,751.07 and the Nasdaq Composite added 219.37 points, or 1.22%, to 18,137.85.
Indexes registered just slight gains for the week following worries about increasing tensions in the Middle East. The Dow was up 0.1%, while the S&P 500 was up 0.2% and the Nasdaq was up 0.1%.
The S&P energy index rose 1.1% on the day along with higher oil prices. With the Middle East concerns, the index jumped 7% for the week in its biggest weekly percentage gain since October 2022.
U.S. President Joe Biden said that if he were in Israel’s shoes, he would think about alternatives to striking Iranian oil fields, adding he thinks Israel has not yet concluded how to respond to Iran’s missile barrage this week.
Rivian shares fell 3.2% after the electric vehicle startup cut its full-year production forecast and delivered fewer vehicles than expected in the third quarter.
Third-quarter earnings for S&P 500 companies are expected to unofficially begin next week. Major financial firms highlight next week’s reports, with JP Morgan Chase, Wells Fargo and BlackRock due on Oct. 11.
Bullish investors are hoping results will justify increasingly rich valuations in the stock market. The S&P 500 is up 20.6% for the year so far.
U.S. ports on the East and Gulf coasts reopened, but clearing the cargo backlog will likely take time.
Advancing issues outnumbered declining ones on the NYSE by a 1.72-to-1 ratio; on Nasdaq, a 2.20-to-1 ratio favored advancers.
The S&P 500 posted 33 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 98 new highs and 91 new lows.
Volume on U.S. exchanges was 10.91 billion shares, compared with the 12.03 billion average for the full session over the last 20 trading days.
Reuters