North American markets and loonie rally on oil prices

TORONTO -- North American stock markets rallied strongly Tuesday, helped by rising oil prices and improved investor sentiment, while encouraging economic data from Ottawa gave the Canadian dollar a solid boost.

See Full Article

Toronto's S&P/TSX composite index climbed 121.75 points to 12,982.10, capping a fourth straight day of gains.

Energy, metals and mining, utilities and financial stocks all helped the commodity-heavy index. Gold was the main drag, losing nearly five per cent.

Much of the strength was linked to another rise in oil prices after Russia hinted that a deal to cap oil production could be reached by OPEC countries later this month.

Saudi Arabia, Russia, Venezuela and Qatar have supported the idea of limiting supply, with the aim of boosting prices, but have said it is conditional on agreement by other producers. So far, Iran has refused to go along, saying it wants to return to pre-sanction production levels.

Even so, Sadiq Adatia, chief investment officer at Sun Life Global Investments, says word of an impending deal is enough to quiet some investor fears that oil prices will fall much further.

It also is a sign that if the largest oil-producing countries can agree to a cap, then they might eventually also agree to a production cut.

"We're seeing step one here (towards a cut) as long as everyone participates," Adatia said.

The April contract for benchmark North American crude added 65 cents to settle at US$34.40 a barrel.

Higher oil prices are usually read by investors as a sign of strong economic growth.

The gain in crude also helped push the Canadian dollar higher, with the loonie adding on 0.65 of a U.S. cent to 74.55 cents U.S.

The currency was also helped after Statistics Canada reported that the economy expanded at an annual rate of 0.8 per cent in the final three months of 2015. Economists had expected real GDP would be flat in the fourth quarter.

In New York, indexes soared in the wake of a U.S. government report that construction spending reached its highest level in eight years in January, which traders saw as a solid vote in the strength of the economy.

The Dow Jones industrial average shot up 348.58 points or nearly three per cent to 16,865.08, the Nasdaq composite index jumped 131.65 points to 4,689.60 and the S&P 500 gained 46.12 points to 1,978.35.

Despite the current positive mood in stocks markets, Adatia cautioned that volatility will still linger for some time.

"People are getting a little optimistic considering we had a very bad start to the year," he said.

"As we start to see this year progress, there is a lot more volatility around the world and that's going to cause more angst. But we'll take these good days."

In other commodities, April natural gas gained three cents to US$1.74 per mmBtu. May copper was also positive, rising a penny to US$2.14 a pound, while April gold gave back $3.60 to US$1,230.80 a troy ounce.



Advertisements

Latest Economic News

  • British Airways cancels flights amid global computer outage

    Economic CTV News
    LONDON -- British Airways cancelled all flights from London's Heathrow and Gatwick airports Saturday as a global IT failure caused severe disruption for travellers on a busy holiday weekend. The airline said it was suffering a "major IT systems failure" around the world. Source
  • Computer outage grounds hundreds of British Airways flights in London

    Economic CTV News
    LONDON -- British Airways cancelled all flights from London's Heathrow and Gatwick airports on Saturday as a global IT failure upended the travel plans of tens of thousands of people on a busy U.K. holiday weekend. Source
  • Broker, agent who worked with subsidiary of Home Capital disciplined

    Economic CBC News
    An Ontario regulator says it has imposed disciplinary actions against a mortgage broker and agent who worked with Home Trust Co., a subsidiary of Home Capital Group, over their handling of mortgages. The Financial Services Commission of Ontario (FSCO) says it conducted a review of 45 mortgage brokers and agents that Home Capital cut ties with after they were accused of falsifying income information several years ago. Source
  • Calgary man on lam in Mexico sentenced to 3 years in $27M mortgage fraud

    Economic CTV News
    CALGARY -- A Calgary man who was arrested after being on the lam for two years in Mexico for his part in a $27 million mortgage fraud has been sentenced to three years in prison. Source
  • Nortel Canada to start paying billions to creditors

    Economic CBC News
    Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings. Nortel Networks Corp. Source
  • Nortel Canada to start paying billions to creditors; first instalment by July

    Economic CTV News
    TORONTO - Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings. Source
  • Que. construction strike: Day 3 kicks off with little to show at bargaining table

    Economic CTV News
    MONTREAL -- There is little progress to report at the table as Quebec's construction strike enters Day 3. Eric Cote, a spokesman for one association of employers, says negotiations resumed late Thursday and that representatives for his group emerged early today suggesting they were a waste of time. Source
  • Ford's ex-CEO leaves company with $51.1M US

    Economic CBC News
    Ford's former CEO Mark Fields is leaving the company with an estimated $51.1 million US in cash, stock awards and pension benefits. Fields, 56, retired earlier this week after three years as CEO. Ford made record profits during his tenure but its stock price dropped nearly 40 per cent on investors' concerns about the company's future. Source
  • Ford's ex-CEO leaves company with US$51.1 million

    Economic CTV News
    DETROIT -- Ford's former CEO Mark Fields is leaving the company with an estimated US$51.1 million in cash, stock awards and pension benefits. Fields, 56, retired earlier this week after three years as CEO. Source
  • Rising program expenses propel fed 2016-17 deficit to $21.8B: preliminary estimate

    Economic CBC News
    A preliminary analysis of the federal books suggests the government ran a 2016-17 deficit of $21.8 billion to put the Liberals close to their projection for the fiscal year. The Trudeau government's spring budget projected a shortfall of $23 billion for the fiscal year, without counting a $3-billion risk adjustment added to the accounting framework. Source