Toronto stock index up in first trading since holiday; U.S. indexes stage late rally
TORONTO -- Markets showed continued volatility Thursday as Canada's main index swung higher following a two-day holiday while U.S. markets sank only to stage a late-day rebound after posting sharp gains a day earlier.
The Toronto Stock Exchange diverged markedly from U.S. markets in early trading to play catch-up to the gains made in New York a day earlier, said Norman Levine, managing director of Portfolio Management Corp. in Toronto.
"The Canadian market is basically catching up to the U.S., to what happened yesterday," he said.
The S&P/TSX composite index closed up 385.02 points, or 2.79 per cent, at 14,165.21 following the Christmas and Boxing Day holidays. On Wednesday, the Dow and S&P 500 were up nearly five per cent while the Nasdaq rose 5.8 per cent.
U.S. markets, which were trading lower for much of the day, staged a late rally to end positive Thursday.
The Dow Jones industrial average was trading down as much as 611 points before turning around to close up 260.37 points at 23,138.82. S&P 500 index ended up 21.13 points at 2,488.83, while the Nasdaq composite ended up 25.14 points at 6,579.49.
Volatility in the markets, which has been elevated for weeks, is even more pronounced on slimmer trading volumes over the holiday stretch, said Levine.
"Volumes don't look all that large, it's a very quiet time of year. Institutions have closed their books for the year, a lot of people are away, so it's not a high liquid time, which actually accounts for some of the exaggerated moves in the last week in both Canada and the US."
The S&P/TSX energy index led the TSX higher with gains of 5.57 per cent, despite a slide in oil prices Thursday as the market caught up to strong oil gains a day earlier.
"A lot of it's make up for yesterday, because oil was up something like nine per cent yesterday, so even though it's off today it's still up," said Levine.
The February crude contract closed down US$1.61 from Wednesday at US$44.61 per barrel, but up from $42.53 on Monday. The February natural gas contract closed up nine cents from Wednesday at US$3.55 per mmBTU, up from $3.42 on Monday.
The Canadian dollar traded at 73.31 cents US, down compared with an average of 73.59 cents US on Monday.
The February gold contract closed up US$8.10 from Wednesday at US$1,281.10 an ounce, and up from $1,271.80 on Monday. The March copper contract closed down three cents from Wednesday at US$2.67 a pound, up from US$2.66 on Monday.
Index and currency in this story: (TSX:GSPTSE, TSX:CADUSD)