Stocks Open Higher on Tech Recovery

Bank Rate Holds Firm

Equities in Canada’s largest centre bounced back from recent losses on Wednesday as beaten-down technology stocks rose sharply, while investors were split over an upcoming central bank rate decision.

The S&P/TSX Composite grabbed 270.82 points, or 1.3%, to open Wednesday at 20,861.80.

The Canadian dollar prospered 0.27 cents at 79.53 cents U.S.

National Bank of Canada raised the price target on Canadian National Railway to $172 from $170. CN shares backtracked $3.58, or 2.3%, to $151.36.

CIBC raised the target price on First National Financial to $46.00 from $44.00. First National shares gained 53 cents, or 1.2%, to $43.25.

National also raised the target price on Metro to $72.00 from $71.00. Metro shares began the session up 85 cents, or 1.3%, to $64.85.

On the economic calendar, the Bank of Canada today held its target for the overnight rate at the effective lower bound of 0.25%, with the Bank Rate at 0.5% and the deposit rate at 0.25%. A number of analysts were expecting the central bank to raise rates a quarter-percentage point.

ON BAYSTREET

The TSX Venture Exchange hiked 18.16 points, or 2.1%, to 865.37.

All but one of the 12 TSX subgroups broke out of the starting blocks higher, with information technology advancing 2.3%, while energy shot higher 2.2%, and consumer discretionary stocks upward 2%.

Only gold fell short of the breakeven mark, and only 0.03% at that.

ON WALLSTREET

U.S. stocks rebounded Wednesday after a strong quarterly report from Microsoft as investors await results from a Federal Reserve meeting expected to set the tone for 2022.

The Dow Jones Industrials popped 355.62 points, or 1%, to 34,653.35.

The S&P 500 recovered 66.77 points, or 1.6%, to 4,423.20.

The NASDAQ hiked 269.76 points, or 2%, to 13,809.06.

All three major indexes are negative in January. The NASDAQ is in correction territory, down more than 14% from its intraday high.

Shares of Microsoft rose 4.1% after the company issued better-than-expected quarterly revenue guidance, boosting the three major indexes.
Microsoft’s “conference call went well and ignited the market,” Scott Redler of T3Live said. Whether the stock’s rally holds “will tell us a lot about tech,” he added.

Technology shares gained following Microsoft’s earnings report. Apple, Amazon, Netflix and Nvidia all traded higher. Tesla shares added 4.2%, with the electric vehicle marker slated to report earnings after the bell.

Corning popped 14.5%, the top gainer on the S&P 500, after the company’s quarterly earnings and revenue topped Wall Street estimates.

On the downside, Boeing fell 2.2% after the aircraft maker reported positive cash flow for the first time since 2019, but it took a $3.5 billion pre-tax charge on its 787 Dreamliner program.

The Fed is set to conclude its two-day policy meeting Wednesday and make an announcement in the afternoon. The central bank is not expected to make any policy changes, but investors will look for clues on when — and by how much — the Fed will raise interest rates later this year.

Market participants will also look for hints on further steps the Fed will take to unwind pandemic-era aid.

Prices for 10-year Treasurys were unchanged, keeping yields at Tuesday’s 1.78%.

Oil prices gained $1.55 to $89.75 U.S. a barrel.

Gold prices tumbled $16.40 to $1,836.10 U.S. an ounce.