Canadian Manufacturing

Energy sector lifts Toronto’s main index, while U.S. performance mixed

The September crude contract gained 72 cents to US$41.94 per barrel

August 11, 2020  The Canadian Press

TORONTO — The energy sector helped lift Toronto’s main stock index on Aug. 10, while those south of the border were mixed.

The S&P/TSX composite index rose 61.02 points to close at 16,605.50 with the biggest gains by stocks in the energy sector, which gained 2.86% as the price of oil rose.

The September crude contract gained 72 cents to US$41.94 per barrel.

“You’re seeing oil price strength today on better economic news from China,” said Nela Richardson, principal, investment strategy at Edward Jones, in a prepared statement.

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“It looks like, from the data that we have, that China is on its way to recovering and that’s good news for global oil.”

That, as well as some progress on further COVID-19 stimulus talks in the United States helped boost some indexes in New York.

The Dow Jones industrial average moved up 357.96 points to 27,791.44 and the S&P 500 index gained 9.19 points to 3,360.47.

U.S. President Donald Trump extended an expired benefit for unemployed workers and other measures through executive orders after talks between the White House and Congress failed to reach a deal on a stimulus package.

“We’re seeing some progress, hopefully,” said Richardson, adding better-than-expected labour data from Canada and the U.S. late last week continued to help market strength.

Statistics Canada reported Aug. 7 that the country’s labour market gained 419,000 jobs last month and the national unemployment rate lowered to 10.9%. The average economist estimate was for a gain of 400,000 jobs and an unemployment rate of 11 per cent, according to financial markets data firm Refinitiv.

In the U.S., employers added 1.8 million jobs in July and the unemployment rate dropped to 10.2%, according to the U.S. Bureau of Labour Statistics. Investors expected to see nearly 1.6 million jobs added.

“I think there is still that better-than-expected economic surprise factor that has been fuelling some of the optimism and the momentum in the market,” said Richardson.

The S&P inched toward breaking a record high it set in February. Its 9.19 point gain, or 0.27%, Aug. 10 put the index less than a per cent away from breaking the record.

“We’re within shouting distance and it wouldn’t be a loud shout,” Richardson said.

Meanwhile, the Nasdaq composite retreated 42.63 points to 10,968.36.

Part of that came from challenges with technology stocks as tensions grow between America and China, she said.

The Canadian dollar traded for 74.88 cents US compared with 74.76 cents US on Aug. 7.

Elsewhere in commodities, the September natural gas contract fell nearly nine cents to US$2.15 mmBTU. The December gold contract advanced US$11.70 to US$2,039.70 an ounce and the September copper contract added nearly seven cents to US$2.86 a pound.

— With files from The Associated Press


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