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The close: TSX up modestly as Wall Street hits another record high

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 201

Mark Blin/Reute

North American markets nudged higher Wednesday as the U.S. Federal Reserve's latest meeting minutes signalled a December rate hike is still on track.

The Toronto Stock Exchange's S&P/TSX composite index was up 30.04 points to 15,800.40.

In New York, it was another record-setting day on Wall Street, despite meagre market movements.

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The Dow Jones industrial average added 42.21 points at 22,872.89, the S&P 500 index inched up 4.60 points at 2,555.24 and the Nasdaq composite index gained 16.30 points to 6,603.55.

Wednesday's release of the Fed's September meeting minutes showed that although officials struggled to come to term with persistently low inflation, some were worried that low unemployment could result in a quick rebound in inflation, and a third rate hike was needed. The central banking system previously raised rates in June and March.

Still, this release signalled nothing new in terms of market expectations, said Macan Nia, a senior investment strategist at Manulife Investments.

"The Fed minutes alluded to the likelihood of an increase in December by 25 basis points, that we believe has already been priced into the market," he said.

Nia added market participants were also watching Prime Minister Justin Trudeau's meeting with U.S. President Donald Trump closely, but there were little signals from their press conference on Wednesday.

"We're all very interested to see the outcome in terms of the NAFTA negotiation," he said."We're all sitting back and waiting to see more concrete details in terms of proposals."

Meanwhile in corporate news, shares of licensed marijuana producer Canopy Growth Corp. (TSX:WEED) rose 5.92 per cent Wednesday, on news of a tie-up with a B.C. greenhouse operator which would more than double its production footprint to about 2.3 million square feet.

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In commodities, the November crude contract added 38 cents to US$51.30 per barrel and the November natural gas contract was unchanged at US$2.89 per mmBTU.

The December gold contract was down $4.90 to US$1,288.90 an ounce and the December copper contract was up four cents to US$3.10 a pound.

The Canadian dollar was trading at an average price of 80.01 cents US, up 0.02 of a cent.

Real estate, utilities, and consumer staples were among S&P 500 sectors that posted gains, while financials were pressured by a slip in Treasury yields and industrials also fell.

"You've got sector rotation grinding the indexes higher and it's hard to see what stops that," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Federal Reserve policymakers had a prolonged debate about the prospects of a pickup in inflation during their September meeting, but many policymakers still felt that another rate increase this year "was likely to be warranted."

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"Nothing changes the opinion that the Fed is likely to hike rates after the December meeting," Hogan said.

Stocks ended near session highs after a report from Politico said Treasury Secretary Steven Mnuchin was pushing president Donald Trump to name Jerome Powell, seen as a safe pick for financial markets, as the next Federal Reserve chairman.

"The market prefers status quo. Everyone knows rates are going up but they prefer the policy that Yellen has laid out. Maybe the market is telling you it thinks it's going to be status quo."

Powell is seen as closer policy-wise to Yellen than another front-runner, Kevin Warsh.

The Dow Jones Industrial Average <.DJI> rose 42.21 points, or 0.18 per cent, to end at 22,872.89, the S&P 500 <.SPX> gained 4.6 points, or 0.18 per cent, to 2,555.24 and the Nasdaq Composite <.IXIC> added 16.30 points, or 0.25 per cent, to 6,603.55.

Gains in Wal-Mart and Johnson & Johnson nudged the Dow Jones Industrial Average to another record high but declines in financials kept gains on the S&P 500 in check.

J&J rose 2.1 per cent to $136.65 after Jefferies upgraded the stock to "buy," saying the company's pharma division would help it top analysts' profit estimates.

The consumer staples sector got a boost from gains in Wal-Mart , which rose 1.9 per cent, as well as from Kroger , which jumped 1.2 per cent to $20.78 after news it was exploring the sale of its nearly 800 convenience stores.

Banks take the focus as JPMorgan Chase and Citigroup report results on Thursday, with analysts warning that results in the sector will largely be held back by low trading volumes compared with a year earlier.

"Third-quarter results of large banks are expected to be tepid," said Stephen Biggar, an analyst at Argus Research. "Trading revenue (will be) down due to low volatility and loan growth remaining flat to slightly negative."

With the S&P 500 up 14 per cent in 2017, investors are betting on strong earnings growth across the S&P 500.

Wunderlich's Hogan said the catalyst to stop the grind higher in stocks would be "some big names missing the mark in earnings, away from any hurricane-related explanations."

General Electric fell 1.2 per cent to $23.07 after JPMorgan said a dividend cut was "increasingly likely" and lowered its price target on the stock.

Advancing issues outnumbered declining ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favoured advancers.

The S&P 500 posted 48 new 52-week highs and nine new lows; the Nasdaq Composite recorded 147 new highs and 28 new lows.

About 5.66 billion shares changed hands in U.S. exchanges, compared with the 6.1 billion daily average over the last 20 sessions.

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