TSX rallies to close higher after mixed day, while dollar and gold prices rise

TSX rallies to close higher after mixed day, while dollar and gold prices rise

TORONTO — A late-day recovery in crude oil helped lift share prices to pull Canada’s main stock index out of a listless trading pattern and allow it to end with a slight increase on Wednesday.

The S&P/TSX composite index closed up 8.10 points at 16,171.06 after a Toronto Stock Exchange session where no sector made remarkable moves either positive or negative.

The lone bright spots were the Canadian dollar, up 0.15 of a cent to 74.52 cents US, and the August gold contract, which continued its run of strength to close at US$1,865.10 an ounce, up US$21.20.

“The market has had a really big second quarter after the down first quarter, and to start July we’ve had a really good run with a lot of indices up four to five per cent,” said Greg Taylor, chief investment officer for Purpose Investments.

“Now, as we head into earnings, it’s all just about trying to figure out if those moves were justified, if there are going to be any negative surprises that would put a bit of a halt to these moves.”

He said investors are cautious ahead of corporate updates expected to be released as companies report on results from a second quarter that was highly influenced by the global COVID-19 pandemic lockdowns.

News was scarce on Wednesday, Taylor said, but many investors were watching results from Rogers Communications Inc.

The telecom company’s shares closed down 83 cents or 1.5 per cent at $54.96 after missing analyst expectations with adjusted net income of $310 million and revenue of $3.15 billion in the second quarter.

On the other hand, Canadian Pacific Railway Ltd. beat expectations even though its net income decreased 12.3 per cent to $635 million in the second quarter. Its shares rose 46 cents or 0.13 per cent to $365.47.

Canadian National Railway Co., which reported results after the market closed on Tuesday, rose $1.18 or 0.92 per cent to $129.87. It said it is recalling some laid off workers and is cautiously optimistic about a recovery in its business.

“The transportation sector is one that will certainly benefit as the economy reopens (after the pandemic),” said Taylor.

The September crude contract was down two cents at US$41.90 per barrel on Wednesday and the August natural gas contract was up 0.6 cents at US$1.68 per mmBTU.

Canadian sectors in the red included energy, financials, health and technology; those in the green included materials, consumer goods, industrials and real estate.

The September copper contract was down 33.5 cents at just over US$2.92 a pound.

In New York, the Dow Jones industrial average closed up 165.44 points at 27,005.84.

The S&P 500 index was up 18.72 points at 3,276.02, while the Nasdaq composite was up 25.76 points at 10,706.13.

Taylor said nagging fears were bubbling up in the absence of news on which to base market activity.

On Wednesday, the United States said it had ordered China to close its consulate in Houston to protect the private information of Americans, a move strongly condemned by the Chinese.

“I think … there’s starting to be a little concern that the earnings could be a negative surprise, China trade tensions could flare up again, or the U.S. election, which really had been overshadowed by the coronavirus crisis, could become something that investors start to worry about,” he said.

By Dan Healing in Calgary

This report by The Canadian Press was first published July 22, 2020.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD, TSX:RCI.B, TSX:CP, TSX:CNR)

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