TORONTO — Shopify Inc. led Canada's main stock index higher to start the week as the technology sector continues to thrive amid the COVID-19 pandemic.
The S&P/TSX composite index closed up 136.66 points at 15,103.22 after getting off to a slow start.
The technology sector was strong in both the U.S. and Canada. It gained 2.6 per cent in Canada as Shopify shares increased $60.96 or 6.2 per cent to $1,050.02. Its shares are up more than 103 per cent this year but Monday's rise was not quite enough for it to regain top spot as Canada's most valuable company.
The Ottawa-based company's shares slipped a little last week after it issued US$1 billion worth of shares.
In New York, the Dow Jones industrial average was down 109.33 points at 24,221.99. The S&P 500 index was 0.39 points at 2,930.19, while the Nasdaq composite was up 71.02 points at 9,192.34.
Big tech has become a safe haven in this market, says Craig Fehr, investment strategist at Edward Jones.
"As we get past the brunt of the virus, of the pandemic, I think it's reasonable to expect the economic complexion, the consumer complexion, the business environment, to have changed a little bit from before the pandemic," he said in an interview.
People have relied on and grown comfortable with technology's role in how people are interacting and business is conducted.
"I think all of that is to suggest that the technology probably does have some opportunities for growth and for profitability on the backside of this."
Consumer staples rose 3.2 per cent, followed by utilities.
Materials was the biggest loser on the day, falling nearly 2.5 per cent as shares of Cascades Inc. lost 6.2 per cent. SSR Minerals Inc. and Alacer Gold Corp. both decreased after they signed a deal to merge operations.
The June gold contract was down US$15.90 at US$1,698.00 an ounce on a strengthened U.S. currency and the July copper contract was down 2.6 cents at US$2.38 a pound.
The Canadian dollar traded for 71.37 cents US compared with an average of 71.77 cents US on Friday.
Health care was pulled lower by Aphria Inc. and Aurora Cannabis Inc., which each lost about 4.3 per cent.
Lower crude oil prices moved energy down with Cenovus Energy Inc. falling 4.5 per cent.
The July crude contract was down US$1.09 at US$25.08 per barrel and the June natural gas contract was up 0.3 of a cent at nearly US$1.83 per mmBTU.
Crude fell despite Saudi Arabia announcing on Sunday that it will reduce output by 1 million barrels a day in addition to reductions in an OPEC pact that includes Russia.
That's because investors aren't sure the new cut to output will ever materialize and because oil demand continues to be threatened by a weak global economy and the risk of second waves of coronavirus infections and lockdowns, said Fehr.
There's already been reports of increased infections in Germany and South Korea.
"The demand and supply environment are equally uncertain at the moment and while we're seeing a relatively flat day in crude prices today, I think it can be expected that we're going to see a lot of volatility in commodities as we move forward as well."
The fact that Monday's stock trading was relatively flat following six strong weeks shouldn't come as a surprise, said Fehr.
"I think that markets are taking the opportunity today to catch their breath and digest a little bit of the information," he said.
But he said stock market volatility could flare with data on economic reopenings that could be both positive and disappointing.
"The real outcome in terms of how the markets are going to react more broadly will be determined by just how much the health-care system can absorb any new flare up and just how restrictive the potential responses would need to be as a way to curb what I think will be the next big moment for the markets."
This report by The Canadian Press was first published May 11, 2020.
Companies in this story: (TSX:SHOP, TSX:CAS, TSX:APHA, TSX:ACB, TSX:CVE, TSX:SSRM, TSX:ASR, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press
