TORONTO (CP) — The Toronto stock market began the week with a big triple-digit advance amid continued optimism among traders that the U.S. Federal Reserve will not raise interests rates any time soon.
The S&P/TSX composite soared 212.46 points to close at 13,552.20 on Monday, bolstered by increases in oil and base metals prices.
In New York, the Dow Jones industrial average added 304.06 points to 16,776.43, adding to a 200-point gain on Friday, while the broader S&P 500 index advanced 35.69 points to 1,987.05 and the Nasdaq gained 73.48 points to 4,781.26.
Ian Nakamoto, director of research at 3Macs, said markets are rebounding after a dismal quarter where stocks became oversold on concerns about global economic performance and volatility in the Chinese stock market.
“We were down so much it looked like we were going into a recession, but it’s just a slow-growth economy,” he said.
The TSX declined by roughly 8.5 in the third quarter, which Nakamoto said is traditionally a weak time for stock markets, while the Dow fell more than eight per cent and the S&P 500 and the Nasdaq were both off well over seven per cent.
On commodity markets, the November contract for benchmark crude oil added 72 cents to settle at US$46.26 a barrel, while November natural gas lost 0.1 of a cent to US$2.45 per thousand cubic feet. December gold added one dollar to US$1,137.60 an ounce and December copper gained three cents to US$2.356 a pound.
The loonie also moved higher, up 0.45 of a U.S. cent to close at 76.41 cents US.
Nakamoto said the Canadian dollar is gaining strength as the prospect of an interest rate hike by the Americans, which would make their dollar more attractive to investors and drive up its value against the loonie, recedes into the future.
In September, the U.S. Federal Reserve bucked expectations and chose not to raise interest rates, citing the struggling stock market and poor economic indicators.
On Friday, the American government released numbers on hiring that showed employers added far fewer new employees than expected in September.
“It looks less and less likely that we’re going to have a rate increase this year if the economy continues to be weak,” Nakamoto said.
The Fed next meets at the end of this month and again in late December.
In corporate news, Suncor Energy (TSX:SU) said it would make a hostile bid to take over Canadian Oil Sands Ltd. (TSX:COS), the largest partner in the massive Syncrude mine. Suncor is offering $4.3 billion in its own stock and would take on about $2.3 billion in COS debt, bringing the total price tag to $6.6 billion.
On the Toronto Stock Exchange, Suncor shares fell 77 cents or 2.18 per cent to $34.56, while COS stock jumped by $3.41, or more than 55 per cent, to end trading worth $9.60.
Peter Henderson, The Canadian Press
