Canada's main stock index gained back valuable ground as morning became afternoon on Monday, despite concerns over the economic impact of the coronavirus, with losses led by oil and gas producer MEG Energy, which sought to shelve an oil sands project.
The TSX Composite Index recovered sharply 137.7 points to move into Monday noon hour at 16,400.75, after a loss last week of nearly 1,700 points, or 9.5%
The Canadian dollar muscled higher 0.32 cents to 74.91 cents U.S.
Communications stocks led the parade, with BCE skyrocketing $2.64, or 4.5%, to $61.59, while Rogers jumped $1.52, or 2.5%, to $63.03.
Among utilities, Capital Power leaped $1.61, or 4.8%, to $35.16, while Northland Power took on $1.32, or 4.4%, to $31.16.
Gold stocks also shared in the glory, with Wesdome Gold surging 53 cents, or 6.1%, to $9.07, while Eldorado Gold added 79 cents, or 6.8%, to $12.44
Energy stocks moved lower, as Secure Energy Services dipped 12 cents, or 3%, to $3.89, while Frontera Energy fell 17 cents, or 2.2%, to $7.42.
Among health-care concerns, Aphria docked 18 cents, or 3.7%, to $4.68, while Canopy Growth slipped 36 cents, or 1.4%, to $24.81.
On the economic front, at 51.8 in February, up from 50.6 in January, the seasonally-adjusted IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI) registered above the 50.0 no-change value for the sixth consecutive month and pointed to the strongest overall improvement in business conditions since February 2019.
ON BAYSTREET
The TSX Venture Exchange recovered 10.09 points, or 2% to 507.70, after a disastrous week in which the index doffed nearly 85 points, or 14.6%.
All but three of the 12 TSX subgroups gained ground by lunch time, with communications climbing 2.5%, utilities better by 2.2%, and gold, up 2%.
The three subgroups were energy, down 0.5%, health-care and consumer discretionary stocks, off 0.3%.
ON WALLSTREET
Stocks rose on Monday in volatile trading as Wall Street tried to rebound from its worst week since the financial crisis amid fears of the coronavirus outbreak.
The Dow Jones Industrials popped 742.79 points, or 2.9%, to venture into noon hour EST at 26,152.15. Apple shares led the Dow higher with a 4.2% jump. Merck and Walmart also gained more than 4%.
The broader S&P 500 gained 80.34 points, or 2.7%, to 3,034.56. Consumer staples, utilities and real estate were the best-performing S&P 500 sectors, advancing more than 2% each. Tech, meanwhile, jumped 1.8%.
The tech-heavy NASDAQ zoomed 234.04 points, or 2.7%, to 8,802.29.
Stocks came off their highs after a key measure on the U.S. manufacturing showed a slowdown last month. The Institute for Supply Management manufacturing index fell to 50.1 in February, the lowest level since the end of 2019. Any reading above 50 signals an expansion.
The Dow, S&P 500, and NASDAQ Composite all fell more than 10% last week, their biggest weekly declines since October 2008. They also entered correction territory, down more than 10% from all-time highs notched earlier in February. Both the Dow and S&P 500 have fallen for seven straight days.
As of Sunday, more than 89,000 cases have been confirmed around the world along with more than 3,000 virus-related deaths. Australia, Thailand and the U.S. reported over the weekend their first coronavirus-related deaths. Rhode Island was the first U.S. state on the East Coast to report a coronavirus case.
The number of cases in England rose to 35 after 12 new cases were confirmed on Sunday. Cases in China also reported more than 500 new cases on Saturday. New York Gov. Andrew Cuomo confirmed Sunday night the state’s first positive coronavirus case.
The virus’ quick spread has raised expectations for easier monetary policy from global central banks, including the Federal Reserve.
Traders have reportedly priced in a 100% probability of a 50 basis-point rate cut later this month. Expectations for another rate cut in April are around 70%.
Prices for the 10-Year U.S. Treasury gained sharply, dropping yields to 1.10% from Friday’s 1.19%. Treasury prices and yields move in opposite directions.
Oil prices gushed $2.24 to $47.00 U.S. a barrel.
Gold prices $30.20 to $1,596.90 U.S. an ounce.
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