TORONTO — Canada's main stock index gained for a second straight week despite closing lower on Friday even as crude oil prices continued to surge.
The S&P/TSX composite index was down 159.54 points or 1.2 per cent at 12,938.30. It gained almost two per cent for the week and 9.2 per cent over two weeks.
The Toronto market has benefited from an increase in oil prices on the prospects that Russia and Saudi Arabia will end their price war by cutting supply by 10 million to 15 million barrels per day.
Crude oil prices have climbed 41 per cent since hitting an 18-year low on Monday, but still remain nearly 54 per cent below the US$61.18 per barrel reached to end 2019.
The May crude contract was up US$3.02, or 11.9 per cent on the day to US$28.34 per barrel and the May natural gas contract was up 6.9 cents at US$1.62 mmBTU.
That helped a series of Canadian oil producers led by Crescent Point Energy Corp., whose shares were up 11.8 per cent. But the overall sector decreased nearly two per cent as Canadian Natural Resources and Suncor Energy Inc. fell 5.3 and four per cent respectively.
Energy observers are anticipating that next week's virtual meeting among the oil producing countries of OPEC plus Russia will result in a co-ordinated cut in output.
"And I think that's got some optimism going in the oil market, that the price of oil at least will stop falling," said Anish Chopra, managing director with Portfolio Management Corp.
While the TSX was up for a second week, U.S. stock markets closed lower for the week after losing ground on Friday. The Dow Jones industrial average was down 360.91 points at 21,052.53. The S&P 500 index was down 38.25 points at 2,488.65, while the Nasdaq composite was down 114.23 points at 7,373.08.
The markets were dragged down by continued uncertainty about the spread of the COVID-19 pandemic and the toll it's taking on workers.
U.S. payrolls fell by 701,000 in March, marking the worst jobs report since 2009. That number will surely rise after the number of jobless claims last week increased by a record 6.6 million, on top of 3.3 million a week earlier.
"There's just a lot of moving parts and it's hard for investors to just get a handle on things," Chopra said in an interview.
He said it's hard to know how long this high period of unemployment will last and how quickly the economy will recover after the lockdowns are lifted.
Some sectors of the economy will recover faster than others, with hospitality and travel likely taking longer, while housing may be benefiting from the rock-bottom interest rates.
Historically a quick snapback has followed a quick slowdown.
But Chopra said this downturn is probably a little tougher to judge because there's more government stimulus and financial leverage in the system.
"And you've got a health care issue, which will be a very big determinant of how quickly the economy is really allowed to come back because the government has really imposed shut downs for health-care reasons," he said.
"As every day goes by, and there's no news of an imminent vaccine or an imminent drug regimen that solves the health care aspects of the coronavirus, I think investors are taking the view that it's just going to take longer to recover."
The Canadian dollar traded for 70.71 cents US compared with an average of 70.53 cents US on Thursday.
The TSX fell in a broad-based decline with all 11 major sectors decreasing, led by health care, consumer discretionary and financials.
Health care was down nearly three per cent with Hexo Corp. shares decreasing 8.7 per cent. The consumer sector fell with BRP Inc. down 6.3 per cent and MTY Group Inc. off 5.8 per cent.
The heavyweight financials sector dropped more than two per cent with CI Financial Corp. shares down 10.3 per cent.
Financials were hit as The Canadian Bankers Association said the country's six largest banks have allowed customers to defer payments on more than 10 per cent of the mortgages in their portfolios as borrowers affected by COVID-19 seek financial help.
Materials was slightly lower despite higher gold prices.
The June gold contract was up US$8.00 at US$1,645.70 an ounce and the May copper contract was down 2.6 cents at US$2.19 a pound.
This report by The Canadian Press was first published April 3, 2020.
Companies in this story: (TSX:HEXO, TSX:CIX, TSX:DOO, TSX:MTY, TSX:CNQ, TSX:SU, TSX:CPG, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press