TORONTO (CP) — North American stock markets regained some composure Monday as traders reconsidered whether a big pullback late last week was overblown.
Toronto’s S&P/TSX index closed up 132.54 points at 13,779.44, although well off its highs of earlier in the day.
The shift followed a decision by the U.S. Federal Reserve last Thursday to stand pat on its trend-setting interest rate, while its comments about global growth left traders feeling especially jittery about the strength of the recovery.
Some of that sentiment had worn off by Monday, partially driven by the heavily weighted financials and energy sectors.
The loonie fell 0.16 of a U.S. cent to 75.50 cents US.
In New York, the Dow Jones industrial average was up 125.61 points at 16,510.19, also well off its triple-digit high of the day, while the broader S&P 500 advanced 8.94 points to 1,966.97 and the Nasdaq gained 1.72 points to 4,828.95.
On commodity markets, the December gold contract fell $5 to US$1,132.80 an ounce, while natural gas was down 3.2 cents at US$2.57 per thousand cubic feet for October.
The November contract for U.S. benchmark crude oil was up $1.94 at US$46.96 a barrel.
Part of the rise in oil prices could be linked to a new report from OPEC which predicts oil prices could hit $80 a barrel by 2020, said Andrew Pyle, a portfolio manager at ScotiaMcLeod in Peterborough, Ont.
“The outlook, in my opinion, is very conservative,” he said.
“Getting back to $80 is not a massive accomplishment in the grand scheme of things. When you get firms starting to curtail production, and more importantly actually pulling back on capital expenditures … that eats into production over the near and medium term.”
In Calgary, Bank of Canada governor Stephen Poloz told an audience that the resource sector ought not to be deterred from making long-term investments despite recent weakness in commodities prices, noting that such investments in the past have paid dividends when prices rise.
In corporate news, shares of German carmaker Volkswagen tumbled 17.1 per cent in Frankfurt following allegations that the German carmaker rigged U.S. emissions tests for about 500,000 diesel cars. The U.S. Environmental Protection Agency said Friday that company had skirted clean air rules and could faces fines of more than $18 billion.
There was no indication that the company would face any penalties in Canada, although the automaker said it had halted sales of the models in question in this country too.
Shares of Suncor Energy (TSX:SU) moved higher after the company announced it would take an additional ownership stake of 10 per cent in the Fort Hills oilsands project for $310 million. Once the transaction closes, Suncor will own 50.8 per cent of the $15-billion project.
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David Friend, The Canadian Press
