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Canada’s main stock index rose on Wednesday, lifted by energy stocks as oil prices gained on signs of improving demand due to countries easing lockdown restrictions worldwide and a fall in U.S. crude inventories.
At 11:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 154.79 points, or 1.04%, at 15,040.27.
The energy sector climbed 5.2% as oil prices jumped more than 4% on Wednesday on signs of improving demand and a drawdown in U.S. crude inventories. Gains were capped by worries over the economic fallout from the coronavirus pandemic and weak refining margins.
Brent crude futures were up $1.38, or 3.98%, at $36.03 per barrel, while U.S. West Texas Intermediate (WTI) July crude futures were up $1.38, or 4.32%, at $33.34 a barrel. Both benchmarks rose more than 5% during the session.
The WTI June contract expired on Tuesday at $32.50 a barrel, up 2.1%, avoiding the chaos of last month’s May expiry, when prices sank well below zero, as storage across the U.S. filled rapidly.
U.S. crude inventories fell by 5 million barrels in the week to May 15 to 526.5 million barrels, Energy Information Administration data showed, compared with analysts’ expectations in a Reuters poll for a 1.2 million-barrel rise.
In Toronto, the financials sector gained 1.6%, while the industrials sector rose 2.2%.
The materials sector, which includes precious and base metals miners and fertilizer companies, slipped 0.5%.
Wall Street’s main indexes surged and the Nasdaq hit its highest level in three months on Wednesday as investors clung to hopes of a recovery from a coronavirus-fueled slump amid signs of more stimulus for ailing sectors.
The tech-heavy index, now about 5% below its all-time high hit in February, was boosted by Facebook Inc and Amazon.com Inc, which were trading at record levels, as well as Apple Inc.
The S&P 500 was about 12% below its all-time peak and the Dow Jones index was short by 17%.
“It relates to the reopening of the economy… some states are further along than others, but it’s giving a little bit of confidence to the markets,” said Robert Pavlik, senior portfolio manager at Slatestone Wealth Llc in New York.
“If we can break through the 3,000 level (on the S&P 500) with some conviction, that’s going to be a positive sign, and it’s probably going to draw more money off the sidelines.”
The three indexes have rallied more than 30% from March lows on unprecedented stimulus, but gains have been capped this month as traders digest mixed headlines on progress in developing a coronavirus vaccine.
Moderna Inc’s Chief Executive Officer said a best-case scenario would see them filing for an approval for their potential COVID-19 vaccine by end 2020 or early 2021, days after announcing promising data from a very small early-stage trial.
Meanwhile, U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell have said the government and the central bank were considering more steps to ensure the worst-hit areas of the economy received adequate support.
All eyes are now on the minutes from the Fed’s latest policy meeting expected at 2 p.m. ET.
The Dow Jones Industrial Average was up 381.54 points, or 1.58%, at 24,588.40, the S&P 500 was up 50.62 points, or 1.73%, at 2,973.56. The Nasdaq Composite was up 181.84 points, or 1.98%, at 9,366.95.
Gains were broad-based with the cyclical sectors including industrials, energy and materials posting their biggest percentage gains on hopes of a pick-up in demand.
Home improvement chain Lowe’s Cos Inc rose 0.5% after posting higher quarterly same-store sales.
Analog Devices Inc gained 8.4% after the chipmaker forecast third-quarter profit ahead of expectations.
Target Corp slipped 1.7% after the big box retailer reported a 64% plunge in quarterly profit, pummeled by costs to tackle the coronavirus outbreak.
Source: Reuters
Edited BY Harry Miller
