The close: TSX climbs to 3-week high as financial stocks rise

Canada’s main stock index hit its highest level in more than three weeks on Tuesday, as gains in financials and industrials stocks offset a decline in the energy group. Wall Street ended sharply higher, led by Apple and Microsoft, while a jump in Treasury yields lifted bank stocks ahead of a key inflation reading this week.

The Toronto Stock Exchange’s S&P/TSX Composite Index ended up 141.68 points, or 0.7%, at 21,377.18, its highest closing level since Jan. 17.

Financial stocks, which make up about a third of the Toronto market, rose 1.2%, also benefiting from rising bond yields. Higher interest rates tend to increase the margins banks can earn on their loans.

Bank of Canada Governor Tiff Macklem is due to speak on Canadian business developments on Wednesday, which could offer clues to the outlook for interest rates.

Money markets expect Canada’s central bank to start raising rates in its next policy announcement on March 2 and raise borrowing costs a total of six times this year.

Industrials added 1.5%, while the materials group, which includes precious and base metal mining companies and fertilizer companies, ended up 2.0%, helped by higher prices gold.

U.S. crude oil futures settled down 2.2% to $89.36 a barrel amid fears that the resumption of indirect talks between the U.S. and Iran could lead to a rise oil exports from the OPEC producer.

The fall in oil weighed on energy stocks, which ended down 3.9%. It included a 6.4% decline in shares of Cenovus Energy Inc after the company reported a quarterly loss.

The benchmark S&P 500 and the tech-heavy Nasdaq reversed early losses and gained in the latter part of the session, with Amazon.com Inc gaining 2.2%, and Apple and Microsoft both advancing more than 1%. %.

The S&P 500 banking index rose 1.9% after the benchmark 10-year US Treasury yield hit its highest level since November 2019, at 1.97%, on rising expectations that the Federal Reserve US will begin to tighten its monetary policy.

Shares of Bank of America Corp, JPMorgan Chase & Co and Wells Fargo all gained more than 1%.

The S&P 500 index for the energy sector fell 2.1% as investors feared that the resumption of indirect talks between the United States and Iran could revive an international nuclear agreement and allow more exports oil from OPEC producer.

French President Emmanuel Macron’s upbeat comments about his meeting with Russian President Vladimir Putin over the Ukraine crisis also lowered oil prices and reduced anxiety on Wall Street, chief investment officer Scott Ladner said. of Charlotte-based wealth management firm Horizon Investments.

“Today’s gain is probably due to some of Macron’s headlines, but it’s also just recognition that the economy is in pretty good shape, and we probably overdid it a bit on the downside. “, said Ladner.

With Tuesday’s rise, the S&P 500 remains down about 5% so far this year, while the Nasdaq is down about 9%.

U.S. consumer price data, due out Thursday, is expected to hit a four-decade high of 7.3%. The numbers follow strong U.S. jobs data last week, which heightened investor concerns that the Fed will tighten rates faster than expected.

Concerns over aggressive US central bank policy tightening, geopolitical tensions in Ukraine and mixed results from Big Tech have weighed on major US indices since the start of the year.

The Dow Jones Industrial Average rose 1.06% to end at 35,462.78 points, while the S&P 500 gained 0.84% ​​to 4,521.52.

The Nasdaq Composite climbed 1.28% to 14,194.46.

Earnings were mixed on Tuesday, with Pfizer Inc falling after the drugmaker’s full-year sales forecast for its COVID-19 vaccine and antiviral pills fell short of estimates.

Amgen Inc jumped nearly 8% after the company announced a buyout of up to $6 billion and expected profits to more than double by 2030.

Meta Platforms, owner of Facebook, fell 2.1% after billionaire investor Peter Thiel decided to step down from the company’s board, leading to a fourth day of losses on the stock after its gloomy forecasts last week wiped out billions of dollars in market value.

Peloton Interactive Inc soared 25%, despite lowering its revenue forecast as the exercise bike maker said it would replace its chief executive and cut jobs in a bid to revive slumping sales.

Coty Inc jumped 8% after the cosmetics seller raised its 2022 profit forecast.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.58 to 1; on the Nasdaq, a ratio of 1.71 to 1 favored advancers.

The S&P 500 posted 29 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 60 new highs and 108 new lows.

Volume on U.S. exchanges was 10.3 billion shares, compared to an average of 12.3 billion over the past 20 trading days.

Reuters, Globe staff

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