Stocks Enjoy Healthy Gains

CP, Home Capital in Focus

Equities traded higher Thursday in Toronto, powered in part by industrial and consumer discretionary stocks.

The S&P/TSX Composite Index gained 72.68 points, to end Thursday at 15,625.56

The Canadian dollar fought its way 0.04 cents at 74.22 cents U.S.

Canadian Pacific Railway was the most influential gainer on the index, adding $5.24, or 2.6%, to $207.26, after it reported higher-than-expected quarterly profit as it earned more from shipments of commodities such as grain and coal, and expressed optimism that demand was improving.

Its rival, Canadian National, rose $1.64, or 1.7%, to $100.36.

Among discretionary issues, Canadian Tire added $1.10 to $166.61.

In the tech field, BlackBerry climbed 22 cents, or 1.8%, to $12.26.

The energy group faded late in the day, as EnCana dipped 40 cents, or 2.7%, to $14.48, while Crescent Point Energy fell 11 cents to $13.62.

Financials finished positive, although shares in Home Capital Group Inc slumped $4.61, or 20.7%, to $17.71 after staff at the Ontario Securities Commission said they would pursue claims that the alternative lender and three current or former executives had breached disclosure rules.

Lastly, in health-care, Aphria turned south 32 cents, or 4.6%, to $6.68, while Valeant Pharmaceuticals gave back 17 cents, or 1.4%, to $11.98.

On the economic calendar, Statistics Canada reported Thursday that Canadians drawing regular employment insurance benefits numbered 554,200 in February, or 11,700, or 2.1%, fewer than the month before.

The agency says the number is similar to the level of June 2016 — just before the administrative changes that took effect last July.

Elsewhere, data showed early Thursday that lending activity to small Canadian businesses dipped in February, though borrowing by medium-sized firms rose for the fourth month in a row on strength in the construction sector and oil-related provinces.

ON BAYSTREET

The TSX Venture Exchange recovered 5.41 points to 821.77.

All but two of the 12 TSX subgroups were higher to close the day, with industrials and consumer discretionaries each improving 1%, and information technology 0.9% to the good.

The pair of laggards were energy, down 1%, and health-care, off 0.5%.

ON WALLSTREET

Stocks south of the border chugged ahead on Thursday as more companies released quarterly results while Treasury Secretary Steven Mnuchin said the administration was close to "major tax reform."

The Dow Jones Industrial Average rocketed 174.22 points to 20,578.71, after the blue-chip index dropped 200 points in the past two days.

Goldman Sachs and American Express contributed the most gains, the credit-card giant reporting better-than-expected first-quarter earnings, lifted in part by higher spending numbers from card members.

The S&P 500 spiked 17.67 points to 2,355.84, with financials, industrials and materials rising more than 1% to lead advancers.

The NASDAQ Composite added 53.74 points to 5,916.78, and posted a record close.

Verizon, another Dow member, missed the mark on both earnings and revenue. The company attributed a 5.1% drop in sales to decreased overage revenue, lower postpaid customers in the quarter and continued promotional activity.

Railway giant CSX posted better-than-expected results and said it expects profit to jump 25% this year. The stock rose more than 5% to lead the Dow transports, which popped more than 1.5%.

As of Thursday afternoon, according to market experts, 79% of the 82 S&P 500 components that had reported quarterly results topped earnings-per-share estimates, while 70% have topped sales expectations

Other firms reporting earnings today – either before the open or after the close – include Philip Morris, ABB, Bank of NY Mellon, Alliance Data, PPG Industries, and Imax.

Mnuchin, who this week backed off of his earlier goal of passing tax reform by August, said the White House will unveil a plan "very soon." However, the Trump administration previously set deadlines for releasing its tax plan that it did not meet.

In economic news, initial jobless claims rose to 244,000, topping expectations, while the Philadelphia Fed business index fell to 22 in April from 32.8 in March. Leading indicators rose more than expected in March.

Investors also looked ahead to the first round of the French presidential election, which is scheduled for Sunday. Uncertainty around the election has grown over the past month after far-left candidate Jean-Luc Melenchon's surprising surge in the polls.

According to French pollster Ifop, Melenchon was just five percentage points behind the front-runner, centrist Emmanuel Macron as of Wednesday.

Prices for the benchmark 10-year Treasury note were lower, lifting yields to 2.24% from Wednesday’s 2.21%. Treasury prices and yields move in opposite directions.

Oil prices slipped 17 cents at $50.26 U.S. a barrel

Gold prices dropped 40 cents at $1,283.00 U.S. an ounce.