At midday: TSX rises as Canada Goose climbs, Wall Street turns negative
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. Foreign investors bought $10.23-billion worth of Canadian securities in December, sealing a new annual record for purchases of bonds, stocks and money market paper.. (Mark Blinch/Reuters)
Canada’s main stock index rose on Thursday, led by gains for financials as bond yields rose, while luxury parka maker Canada Goose Holdings Inc made its stock market debut, trading well above the price of its initial public offering.
The winter outerwear company’s shares traded at C$22.05 after it had set on Wednesday the price of its IPO at C$17 per share.
Bond yields rebounded, lowering the value of insurance companies’ liabilities and increasing net interest margins of banks. Yields tumbled on Wednesday after the Federal Reserve raised interest rates but did not flag an accelerated pace of monetary tightening.
The country’s major banks were among the most influential movers on the index, with Royal Bank of Canada gaining 1.1 per cent to C$97.71, while the overall financials group gained 0.7 per cent.
Premium Brands Holdings Corp climbed nearly 4 per cent to C$76.21 after reporting record fourth-quarter results and a 10.5 per cent increase in its dividend.
At midday, the Toronto Stock Exchange’s S&P/TSX composite index was up 60.96 points, or 0.39 per cent, to 15,581.87.
The materials group, which includes miners and fertilizer companies, added 0.2 per cent as base and precious metal prices rose.
Gold futures rose 2.3 per cent to $1,227.2 an ounce, and copper prices advanced 0.8 per cent to $5,910 a tonne. Eight of the index’s 10 main groups were higher, with energy unchanged as oil prices edged lower. U.S. crude prices were down 0.14 per cent at $48.79 a barrel.
Oil prices jumped on Wednesday after a dip in U.S. crude inventories that suggested OPEC-led output cuts were starting to drain supplies.
Foreign investment in Canadian securities dropped to its lowest level in more than a year in January, as non-residents bought bonds while selling stocks and money market paper, Statistics Canada said.
U.S. stocks slipped on Thursday as declines in the health-care sector outweighed gains in financial stocks.
Biogen was the biggest drag on the health sector, after downgrades by Morgan Stanley and Leerink triggered a 5.1 percent decline in the stock.
The S&P 500 healthcare index fell 0.95 percent, the biggest drop among the six other sectors that were in the red.
Financial stocks were the biggest gainers, helped by better-than-expected data on the housing sector in February and a dip in weekly unemployment benefit numbers.
The Fed raised rates by a quarter point to 0.75-1.00 percent on Wednesday, responding to continued strength in the labor market and a pick up in inflation.
However, the central bank stuck to its outlook for two more rate hikes this year and three in 2018.
“We saw some dramatic moves yesterday, so anything that was tied to the reflation trade got a bit pressured,” said Marcelle Daher, senior managing director, asset allocation at Manulife Asset Management in Boston, Massachusetts.
“There is certainly the element of profit taking today.”
In late morning trading, the Dow Jones Industrial Average was down 6.94 points, or 0.03 percent, at 20,943.16, the S&P 500 was down 2.61 points, or 0.11 percent, at 2,382.65 and the Nasdaq Composite was up 0.97 points, or 0.02 percent, at 5,901.02.
Shares of Tesla rose 2.8 percent to $262.94 after the electric carmaker said it would raise about $1.15 billion as the company speeds up the launch of its Model 3 sedan.
Oracle surged to a record high of $46.99 and was the top stock on the S&P after the business software maker issued a better-than-expected quarterly profit.
Advancing issues outnumbered decliners on the NYSE by 1,629 to 1,166. On the Nasdaq, 1,658 issues rose and 957 fell.
The S&P 500 index showed 49 new 52-week highs and no new lows, while the Nasdaq recorded 128 new highs and 35 new lows.