MARKET NEWS
The close: TSX ends at record high as pot stocks, Shopify surge
The Canadian stock market closed at another record high Tuesday, extending its winning streak to seven days, even as the benchmark U.S. stock index ended with a slight loss.
The S&P/TSX Composite Index closed up 78.36 points, or 0.43%, at 18,408.62. Cannabis shares surged, pushing the health-care index up just over 8%. The tech sector also had a strong session on the back of Shopify, which spiked 6.11% to its highest price ever.
On Wall Street, the Nasdaq extended a winning streak to seven straight days but the broad market closed slightly lower as investors rotated out of large-cap tech names into other sectors seen as benefiting from President Joe Biden’s proposed $1.9 trillion stimulus bill.
The tech-heavy Nasdaq hit an all-time high for the fifth consecutive session on early gains in Apple Inc, Amazon.com Inc and Google-parent Alphabet Inc, which later turned lower amid a shift in portfolio allocations.
The NYSE FANG+TM index, which includes Facebook Inc, Netflix Inc and Tesla Inc, rose to an all-time high.
With the number of U.S. COVID-19 cases falling and expectations the stimulus package will be approved in Congress, investors are hard-pressed to find significant negatives, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“You’re not seeing money coming out of the market and going into cash,” James said. “You’re seeing money coming out of one sector and being rotated into another sector to maintain an overall long bias.”
Largely upbeat corporate earnings, along with monetary and fiscal support, have powered the major U.S. stock indexes to record highs. But analysts caution the new COVID variants and any glitches in vaccine rollouts could sour positive sentiment.
“The backdrop is largely positive for stocks and I’m not sure there could be a better backdrop for risk assets in the near to intermediate term,” said William Herrmann, co-founder and managing partner at Wilshire Phoenix in New York City.
Unofficially, the Dow Jones Industrial Average fell 10.72 points, or 0.03%, to 31,375.04, the S&P 500 lost 4.3 points, or 0.11%, to 3,911.29 and the Nasdaq Composite added 20.06 points, or 0.14%, to 14,007.70.
The energy sector, among those that led the recent rally, slipped a bit, while communication services rose.
Data last week showing slower-than-expected jobs growth in the labor market underscored the need for more government aid to blunt the effect of the COVID-19 pandemic, Biden has said.
Democrats in the U.S. Senate continue to try to find a way to include a minimum wage increase in a comprehensive COVID-19 relief bill they aim to advance in the coming weeks, Senate Majority Leader Chuck Schumer said on Tuesday.
Toymaker Mattel Inc rose, while telephone equipment maker Cisco Systems Inc slipped ahead of reporting earnings after market close.
Analysts forecast a fourth-quarter S&P earnings gain of about 2.5%, a stark reversal from the 10.3% annual decline seen at the beginning of the year, per Refinitiv.
Gucci lipstick maker Coty Inc tumbled as weak demand for makeup products wiped millions off its quarterly revenue.
Take-Two Interactive Software Inc fell after the videogame publisher posted a drop in quarterly adjusted sales and shied away from announcing any new big releases.
Bitcoin fast approached the $50,000-mark as the afterglow of Elon Musk-led Tesla’s TSLA.O investment in the cryptocurrency had investors reckoning it may become a mainstream asset class for both corporations and money managers.
Cryptocurrency miner Riot Blockchain and Marathon Patent Group extended sharp gains for the second day, but Tesla’s shares dropped.
Oil prices rose for their seventh straight session of gains, touching 13-month highs as investors kept betting that fuel demand will rise while OPEC and allied producers keep a lid on supply.
Brent settled up 53 cents, or 0.9%, to $61.06 a barrel. U.S. West Texas Intermediate crude (WTI) for March was at $58.36 a barrel, up 39 cents or 0.7%.
The session peaks for both benchmarks were the highest since January 2020.
“With Brent over $60, it’s been great psychologically ... and everyone is feeling bullish about stronger demand and global inventories in further decline,” said John Kilduff, partner at Again Capital LLC in New York.
The markets have rallied since November as COVID-19 vaccines are being distributed worldwide, and as governments and central banks deploy huge stimulus packages to boost economic activity.
Top exporter Saudi Arabia is curbing supply in February and March, on top of cuts by fellow producers in the Organization of the Petroleum Exporting Countries and their allies, prompting forecasts of a supply deficit this year.
“The Saudis’ intent to eliminate a global supply surplus appears to be on track and capable of boosting crude prices further,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Read more: Stocks that saw action Tuesday - and why
Reuters, Globe staff
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