TORONTO (CP) — The Toronto stock market closed with a modest gain Tuesday after major bloodletting the previous session that saw Canada’s main index descend to levels not seen in almost two years.
The S&P/TSX index ended the trading day up 32.38 points at 13,036.96 after see-sawing for most of the day. The TSX plunged more than 370 points or some 2.8 per cent on Monday and remains not far off levels last seen in October 2013.
New York markets were mixed, helped by a rebound in health-care issues that have sold off recently, mainly over fears of government intervention on the issue of soaring drug prices.
The Dow Jones industrial average rose 47.24 points to 16,049.13 after dropping more than 300 points on Monday, while the broader S&P 500 index edged up 2.32 points to 1,884.09.
The Nasdaq, which plummeted 142 points — or more than three per cent — in Monday’s major retreat, gave back another 26.65 points to 4,517.32.
“Really a quiet day apart from the health-care side,” said Ben Jang, portfolio manager at Nicola Wealth Management in Vancouver.
“If you look in the U.S. (markets), a lot of the commodity driven names and health-care (issues), which have been leading the sell-off, are the ones that are rebounding the strongest today.”
Jang noted that it was a similar situation in Canada except for the TSX capped health-care sector, which was the leading decliner as it lost more than four per cent.
That was mainly the result of a continued sell-off of shares in Valeant Pharmaceuticals International (TSX:VRX), one of the largest companies in Canada by market capitalization that accounts for most of the sector’s weighting.
Valeant has become a target of U.S. Democrats after boosting the price of two heart medications by more than 200 and 500 per cent respectively after acquiring them from another company. It stock was down $9.75 or 4.4 per cent to $212.06 on heavy volume or 1.16 million shares on the TSX after plunging more than 16 per cent Monday.
“We’ve had hyper-inflation in drug prices,and obviously this has become headline news,” Jang said. “. . . And with the political debate we’re going to have more concerns over this front.”
On commodity markets, the November contract for benchmark crude oil gained 80 cents to US$45.23 a barrel, while November natural gas gave back just over eight cents to US$2.59 a barrel and December gold lost $4.90 to US$1,126.80 an ounce.
Meanwhile, the loonie lost 0.13 of a U.S. cent to 74.53 cents US as it continued to test 11-year lows.
Jang said the loonie was likely to continue to struggle against the U.S. dollar as long as there is weakness on the energy side, not to mention an expected increase in American interest rates later this year.
“All signs point to continued strength in the U.S. economy. So I think there is going to be a growing divergence between Canada and U.S. and what that means is a stronger U.S. dollar,” he said.
Brian McKenna, The Canadian Press
