TSX posts gain despite energy weakness, U.S. markets rally to start the week

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This article was published 08/01/2024 (633 days ago), so information in it may no longer be current.

TORONTO – Canada’s main stock index rose Monday despite losses in the energy sector, while U.S. markets also gained, led by a more than two per cent rise for the Nasdaq.

It was a strong start to the second week of the year, after last week saw Wall St. break the nine-week winning streak that ended 2023.

Strength in the tech sector helped lift U.S. markets, said Pierre-Benoît Gauthier, assistant vice-president of investment strategy at IG Wealth Management.

In New York, the Dow Jones industrial average was up 216.90 points at 37,683.01. The S&P 500 index was up 66.30 points at 4,763.54,while the Nasdaq composite was up 319.70 points at 14,843.77.

The S&P/TSX composite index closed up 137.36 points at 21,074.91.

The tech sector got a boost from Nvidia, Gauthier noted — the company’s stock rose 6.43 per cent after announcing new products and providing updates on its uses of artificial intelligence.

The market was also helped by lower bond yields, said Gauthier.

However, losses from Boeing dragged the Dow down, with the index up 0.58 per cent, lagging behind its peers. The company’s stock was down more than eight per cent Monday after one of its jets had an inflight blowout during an Alaska Airlines flight, prompting the U.S. to ground the 737 Max 9.

This week will bring fresh U.S. consumer inflation data on Thursday.

And on Friday, fourth-quarter earnings season kicks off with the big American banks, which can serve as a bellwether for the consumer, Gauthier said.

“That’s going to be very interesting and will probably give a strong indication of where we are heading for 2024.”

Earnings expectations now are for growth, said Gauthier, compared with more subdued expectations last year.

North of the border, a drop in oil prices weighed on the TSX, with the energy index down 1.9 per cent.

“Once again, even though we have geopolitical tensions, supply concerns are overshadowing the geopolitics,” said Gauthier.

The volatility in oil prices is likely to continue into the near future, said Gauthier.

“It’s going to be really dependent on both geopolitical tensions and economic data.”

The February crude oil contract was down US$3.04 at US$70.77 per barreland the February natural gas contract was up nine cents at US$2.98 per mmBTU.

The Canadian dollar traded for 74.78 cents UScompared with 74.92 cents US on Friday.

The February gold contract was down US$16.30 at US$2,033.50 an ounce and the March copper contract was up less than a penny at US$3.81 a pound.

— With files from The Associated Press

This report by The Canadian Press was first published Jan. 8, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Note to readers: This is a corrected story. An earlier version incorrectly stated the direction the S&P/TSX composite moved in late-morning trading.