(Toronto) Canada’s main stock index closed at a new high Tuesday, helped by rising oil prices and strength in the energy sector, while U.S. stock markets fell.
Updated yesterday at 10:11 a.m.
Rosa Saba
The Canadian Press
Energy stocks put the S&P/TSX Composite Index in the green, even as most other sectors were lower. The index closed 33.62 points higher at 24,033.99, just a tad above the record set last week when it closed above 24,000 for the first time.
“Generally speaking, there is a sense of risk aversion here, not in all markets, but in most markets,” said Dustin Reid, vice president and chief fixed income strategist at Mackenzie Investments.
“I think people are obviously concerned about escalating geopolitical risk globally, particularly in the Middle East,” he added.
Oil prices jumped Tuesday as conflict in the Middle East intensified, with Iran firing missiles at Israel.
The crude oil contract rose US$1.66, or 2.44%, to US$69.83 per barrel.
So far this year, global demand, OPEC (Organization of the Petroleum Exporting Countries) announcements and news from China have been the main drivers of oil price movements, Mr. Reid said. the conflict in the Middle East playing a lesser role.
But the escalation is raising fears of a major supply problem in the near future, he said.
A sustained rise in oil prices would make central banks’ interest rate decisions more difficult, Reid said, because gasoline prices play an important role in inflation, both directly and indirectly.
In New York, the Dow Jones industrial average fell 173.18 points to 42,156.97. The S&P 500 index lost 53.73 points to 5,708.75, while the NASDAQ Composite Index fell 278.81 points to 17,910.36.
Investors took profits Tuesday in sectors that have performed well this year, Mr. Reid said, namely technology.
But oil and gas companies and defense companies have seen their stock prices buck the trend and rise.
Two U.S. economic reports on Tuesday offered a mixed view of the economy, with a weaker-than-expected report on manufacturing but a stronger-than-expected report on job openings.
“The main takeaway, I think, is that the job market in the United States is weakening, but it’s certainly not collapsing,” Mr. Reid said.
In recent months, the US Federal Reserve has increasingly focused on employment data. On Friday, the monthly payroll report will be released, which has become a more important factor in markets than inflation these days, Mr. Reid noted.
The Canadian dollar stood at 74.05 US cents on Tuesday compared to 74.08 US cents on Friday. The loonie was closed to trading on Monday due to the National Day for Truth and Reconciliation.
On the New York Mercantile Exchange, the price of natural gas fell by two US cents to US$2.90 per million BTU.
Gold prices rose US$30.90 to US$2,690.30 an ounce, while copper rose four cents to US$4.59 a pound.
