TORONTO – A lacklustre week scant of economic news was not enough to grind North American stock markets lower, as the main indices in Toronto and New York closed Wednesday in positive territory.
The S&P/TSX composite index in Toronto gained 8.96 points to 14,533.57, with advances in industrials and health care offsetting pressure from declining gold stocks.
In New York, the Dow Jones industrial average was up 36.02 points at 18,595.03, marking its ninth straight day of gains and its longest streak since 2013.
The broader S&P 500 composite index rose 9.24 points to 2,173.02 and the Nasdaq composite was ahead 53.56 points to 5,089.93.
Philip Petursson, chief investment strategist at Manulife Mutual Funds, says the markets are taking a brief pause from the rally that kicked off shortly after Britain’s Brexit vote last month. The positive sentiment was not driven by any major data points, and traders are now taking a break to decide if it’s too much, too fast.
“For the enthusiasm to continue, we’ll need to see a combination of things,” said Petursson.
“We need to see earnings improving and guidance improve. We need to see continued manufacturing in the U.S., and from the Canadian perspective, we need to see a resumption of the rally in oil and gold.”
He noted that in Canada, the latest round of bank-earnings results in late August will be watched closely, with strong reports having the potential to drive stock markets higher.
The Canadian dollar dropped 0.16 of a U.S. cent to 76.60 cents US, despite a gain in oil prices.
The price of crude rose after the U.S. reported that the amount of oil supplies held in inventories dropped last week. The August crude contract was up 29 cents at US$44.94 per barrel, while the more heavily-traded September contract gained 30 cents to US$45.75 per barrel.
Petursson forecasted that oil prices have bounced back from their lows and will continue to head up to as much as US$55 a barrel by the end of the year.
“If we continue to see a drop in U.S. oil production on a weekly basis, which we’ve had through this year, and actually since the peak of last year… that will be positive for oil prices to move higher,” he said.
In other commodities, the August natural gas fell seven cents at US$2.66 per mmBTU and September copper contracts added a penny to US$2.25 a pound.
Meanwhile, the calmness in markets took away demand for bullion as August gold fell $13 to US$1,319.30 an ounce.
— With files from The Associated Press
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