Stock markets close higher as loonie slides on oil price, strength in USD

TORONTO – North American stock markets closed higher heading into the weekend, with one index hitting a new record high, as lower oil prices and strong U.S. earnings results weighed on the Canadian dollar.

“Not much trading volume out there,” said Allan Small, a senior adviser at Holliswealth. “All’s quiet in the markets right now.”

The loonie closed at 76.07 cents US, dropping 0.35 of a U.S. cent from Thursday’s close, partly due to a slide in the benchmark oil price. The September crude contract fell 56 cents at US$44.19 per barrel.

“But I think it’s more of a U.S. story of strength versus a Canadian story of weakness,” said Small.

The greenback has benefited from what has so far been a strong earnings season south of the border, he noted.

U.S. banks and tech companies — such as Microsoft, Qualcomm and Intel — have all reported strong results this quarter.

“A lot of people will say the bar has been set pretty low,” said Small. “That may be true, but you’re seeing earnings now beating on the bottom line and the top line.”

The Toronto Stock Exchange’s S&P/TSX index rose 34.83 points to 14,600.66, led by the telecom sector, which was up 1.31 per cent.

Meanwhile, utilities stocks climbed 0.72 per cent, while the health-care sector of the TSX slipped 2.48 per cent.

The financials sector of the TSX was up 0.28 per cent, which Small attributes to a knock-on effect stemming from strong earnings performance by the U.S. banks.

In New York, the Dow Jones industrial average climbed 53.62 points to 18,570.85 while the Nasdaq composite added 26.26 points at 5,100.16.

The broader S&P 500 composite index gained 9.86 points to hit a new record high of 2,175.03.

In commodities, September natural gas was up eight cents at US$2.74 per mmBTU, August gold dropped $7.60 to US$1,323.40 an ounce and September copper contracts fell two cents to US$2.24 a pound.

Traders are looking forward to next week, when both the Bank of Japan and the U.S. Federal Reserve will hold policy meetings.

In Europe, markets were mixed following reports suggesting that countries that use the euro are proving more resilient to the turmoil surrounding Britain’s vote to exit the European Union.

Germany’s DAX index lost 0.1 per cent while France’s CAC 40 index was up 0.1 per cent and Britain’s FTSE 100 climbed 0.5 per cent.

Japan’s Nikkei 225 index gave back 1.1 per cent, Hong Kong’s Hang Seng index lost 0.2 per cent and South Korea’s Kospi index dipped 0.1 per cent.

—With files from the Associated Press.

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