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Canada’s main stock index rose on Tuesday as the energy sector jumped almost 2.5% on signs of improving crude oil demand, while sentiment was also bolstered by a record increase in U.S. retail sales and prospects of more economic stimulus.
Oil prices rose on Tuesday as Wall Street surged and the International Energy Agency (IEA) increased its oil demand forecast for 2020, but gains were capped by worries about a second wave of coronavirus cases.
Brent crude futures were up 59 cents, or 1.5%, to $40.31 a barrel. U.S. West Texas Intermediate crude (WTI) rose 51 cents, or 1.4% to $37.63 a barrel.
Oil prices were bolstered as U.S. stocks opened higher on Tuesday after a record increase in May retail sales revived hopes of a swift post-pandemic economic rebound, with sentiment also lifted by data showing reduced COVID-19 death rates in a trial of a generic steroid drug.
The U.S. Federal Reserve is set to start purchasing corporate bonds on Tuesday as part of an already announced stimulus scheme, while latest data showed a record jump in U.S. retail sales in May as Americans resumed spending after weeks of lockdowns.
At 11:41 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 226.11 points, or 1.47%, at 15,585.77.
The financial and industrial sectors both gained 2.1% , while the utilities sector rose 0.8%.
The materials sector, which includes precious and base metals miners and fertilizer companies, erased early gains and sat down 0.8%.
Gold edged up in seesaw trade with spot gold rose 0.2% to $1,727.86 per ounce by 11:18 a.m. ET. U.S. gold futures gained 0.5% to $1,736.20 per ounce.
U.S. stocks advanced on Tuesday after a record surge in May retail sales revived hopes of a swift post-pandemic economic rebound, with sentiment also lifted by data showing reduced COVID-19 death rates in a trial of a generic steroid drug.
A Commerce Department report showed overall retail receipts rose 17.7% last month as Americans resumed spending after weeks of lockdown, although the rebound retraces only a fraction of the historic drops in March and April.
Retailers Kohl’s Corp and Nordstrom Inc surged 9.4% and 11.8%, respectively, and were among the top advancers on the S&P 500 index.
“We had retail sales which is giving signals to the investing community that things are better than first assessed,” said Andre Bakhos, managing director at New Vines Capital Llc at Bernardsville, New Jersey.
Results from a UK-led trial showed giving low doses of the generic steroid drug dexamethasone to patients admitted to hospital with COVID-19 reduced death rates by around a third among those with the most severe cases of infection.
U.S. stocks ended a volatile session higher on Monday as the Federal Reserve said it would start buying corporate bonds to infuse liquidity. A report overnight said the Trump administration was preparing a nearly $1 trillion infrastructure proposal.
“The Fed committing to buying corporate bonds is also giving the market confidence that it is going to be there on several levels,” Bakhos said.
The S&P 500 is now only about 8% below its all-time high hit four months earlier, although the pace of gains have slowed since the Fed issued a grim economic outlook last week.
In his prepared remarks, Fed Chair Jerome Powell reiterated the United States faces an uncertain, uneven and prolonged recovery from the coronavirus crisis.
The Dow Jones Industrial Average was up 421.70 points, or 1.64%, at 26,184.86, the S&P 500 was up 49.90 points, or 1.63%, at 3,116.49. The Nasdaq Composite was up 142.12 points, or 1.46%, at 9,868.14.
All 11 S&P sub-indexes were trading higher, with energy , technology and materials climbing about 2% each.
Industrial giants Caterpillar Inc jumped 5% and Boeing Co 4%, leading gains on the blue-chip Dow index.
Eli Lilly and Co jumped 14.1% after its breast cancer therapy Verzenio met the main goal of reducing the risk of it returning in the early stages in a late-stage study.
Reuters
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