TORONTO — Broad-based strength helped buoy Canada's main stock index against losses in the energy sector Wednesday, while U.S. markets rose, particularly the Nasdaq which gained two per cent.
The S&P/TSX composite index was down 16.33 points at 20,751.05.
In New York, the Dow Jones industrial average was up 6.92 points at 34,092.96. The S&P 500 index was up 42.61 points at 4,119.21,while the Nasdaq composite was up 231.77 points at 11,816.32.
The markets have been quite resilient this week, said Ian Chong, associate portfolio manager for First Avenue Investment Counsel Inc.
Markets slowly sold off during the day as they anticipated the coming interest rate announcement by the U.S. Federal Reserve.
When the rate hike came in as expected at a quarter of a percentage point, markets went a little lower, reacting to hawkish messaging from the central bank that implied more than one rate increase could still be on the horizon, said Chong.
But after Federal Reserve chairman Jerome Powell gave a speech indicating that the central bank will make future rate decisions on a meeting by meeting basis, markets climbed for the rest of the day, likely embodying some relief, said Chong.
“It sounds much more balanced this time around,” said Chong.
While it’s clear the central bank isn’t ready to pause or pivot yet, Chong said the markets likely rallied on relief that the bank didn’t double down on its hawkish tone.
Meanwhile, oil prices were down Wednesday, and the energy index on the TSX lost 2.8 per cent. Much of these losses were from TC Energy, said Chong, which was down 5.6 per cent on news that the Coastal Gaslink project will cost more to complete than expected.
As earnings continue to roll in this week, with big tech names including Apple and Alphabet set to release results, Chong said markets could reverse some of the week's gains.
Earnings overall haven't been as bad as some expected, but some of the outlooks have been weak, said Chong.
The Canadian dollar traded for 75.07 cents UScompared with 74.91 cents US on Tuesday.
The March crude contract was down US$2.46 at US$76.41 per barreland the March natural gas contract was down 22 cents at US$2.47 per mmBTU.
The April gold contract was down US$2.50 at US$1,942.80 an ounce and the March copper contract was down 12 cents at US$4.11 a pound.
This report by The Canadian Press was first published Feb. 1, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
