Toronto stock market heads higher on relatively quiet day; loonie is unchanged

TORONTO – Canada’s main stock market registered a moderate gain Monday, on a relatively quiet day, as traders took a break from the record-breaking advances seen last week.

“It’s a catch-your-breath kind of day,” said Craig Fehr, a Canadian market strategist at Edward Jones in St. Louis.

“There’s been a lot of movement in equities, there was a lot of data last week. Traders are shifting sights a bit this week to focus on corporate earnings announcements.”

The Toronto Stock Exchange’s S&P/TSX composite index added 49.98 points at 14,532.40, supported by the consumer discretion and materials sectors.

The loonie was unchanged at 77.30 cents US amid a decline in oil prices.

The August crude contract was down 71 cents at US$45.24 a barrel, while the September contract — which is currently trading at a larger volume — also fell 71 cents to $43.94 a barrel.

Wall Street saw small gains, even though the Dow Jones industrial average and S&P 500 index both hit record closes. The Dow gained 16.50 points at 18,533.05, while the broader S&P jumped 5.15 to 2,166.89. The Nasdaq composite was ahead 26.19 points at 5,055.78.

Fehr said the latest earnings have shown that the weakness seen in past quarters was really due to the declining energy industry and not resulting from failures in the core businesses of these companies.

“We are starting to see a stable foundation for markets to move higher from here on corporate earnings,” he said. “We’re off to a good start.”

Bank stocks rose after Bank of America turned in earnings that were better than analysts were expecting.

The big news this week that has the potential to move global stock markets will be the meeting of the European Central Bank on Thursday. The bank was not expected to announce any major policy changes, but traders will be watching to see if they comment on Britain’s surprising Brexit vote last month.

Fehr said it’s interesting to see the markets take Friday night’s failed coup in Turkey as a non-event.

Over the weekend, Turkey responded to the coup attempt by rounding up some 6,000 people, including hundreds of judges and prosecutors. It has since fired nearly 9,000 police officers, bureaucrats and others, while detaining thousands more alleged to have been involved the action, according to the state-run Anadolu news agency.

“The fact that we saw the rise and demise of that coup very quickly helped east investors’ fears,” Fehr said. “We saw a slight pullback on Friday, and there was some hesitation over what the weekend may bring. But we are seeing markets behave more rationally and taking some of these headline risks in stride. There’s no longer just a knee-jerk reaction.”

Meanwhile, commodities were mixed as the August gold contract rose $1.90 to US$1,329.30 an ounce and August natural gas fell three cents at US$2.72 per mmBTU. September copper contracts were unchanged at US$2.24 a pound.

— With a file from The Associated Press

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