North American stock markets rebound after losses, loonie edges up
This is a file image of various stocks.
TORONTO -- North American stock markets partially recovered Tuesday from the worst drop in nearly four months on heightened concerns about the impact of the coronavirus outbreak in China.
It's unclear what prompted the rebound but people may be getting more comfortable with the containment efforts across China, said Natalie Taylor, a portfolio manager with CIBC.
"Kind of a more muted reaction so I think the overhang is going to continue for a little bit until this has run its course," she said in an interview.
The S&P/TSX composite index closed up 58.36 points at 17,500.88.
In New York, the Dow Jones industrial average was up 187.05 points at 28,722.85. The S&P 500 index was up 32.61 points at 3,276.24, while the Nasdaq composite was up 130.37 points at 9,269.68. U.S. markets were helped by tech companies including Apple and Microsoft.
Taylor said she expects elevated volatility will continue near-term, noting it took a few months for markets to calm down following the SARS epidemic in 2003.
"I'm not sure we can declare victory," she said of Tuesday's stock improvement. "This issue is still hanging out there and there's still uncertainty with regards to what the economic implications are."
The Canadian dollar traded for 75.88 cents US compared with an average of 75.86 cents US on Monday.
Health care led the TSX, gaining 4.4 per cent with the improved share performance of several cannabis producers. Canopy Growth Inc. rose 10.8 per cent after being upgraded by an analyst.
Technology and industrials also climbed, with Shopify Inc. gaining 3.4 per cent after the Ottawa-based tech company said it will hire 1,000 people in Vancouver and open its first permanent office in the city in late 2020.
Energy was also up as the price of crude oil increased for the first time in six trading sessions, helped by Cenovus Energy Inc.
The March crude contract was up 34 cents at US$53.48 per barrel and the March natural gas contract was up three cents at US$1.91 per mmBTU.
Materials and consumer staples lost the most on the day with materials dropping as Yamana Gold Inc. fell by 4.8 per cent.
The February gold contract was down US$7.60 at US$1,569.80 an ounce and the March copper contract was down 1.7 cents at US$2.58 a pound.
Markets will be watching the Federal Reserve Wednesday for its latest interest rate decision. While rates aren't expected to change, markets will parse every word in the commentary and outlook, said Taylor.
"We're off to a pretty volatile start in 2020 and whether any of that factors into their thinking, we'll have a better sense of that tomorrow."
This report by The Canadian Press was first published Jan. 28, 2020.