Economy & Markets

Gold shines; oil price drops

By Linda Nguyen |
Source: The Canadian Press

North American stock markets continued their winning streak Wednesday as indices once again closed at all-time highs on strong economic data in both Canada and the U.S.

In Toronto, the S&P/TSX composite index climbed 58.92 points to 15,844.95 to cap off a fourth straight day of record finishes. The index has been ahead for the past seven sessions.

Health-care and telecom stocks were the biggest advancers on the commodity-heavy market, with Valeant Pharmaceuticals gaining 5.56%, or $1.16, to close at $22.02 a share.

Investors also seemed pleased that telecom giant BCE Inc. cleared its final regularly hurdle in buying Manitoba Telecom Services after the Competition Bureau gave the $3.9 billion acquisition the green light.

The deal, which was first announced last May, is expected to close March 17. Shares in Bell gained 1.12%, or 65¢, to $58.65, while shares in MTS added more than 5%, or $1.92, to finish at $39.52.

On the economic front, another sign emerged that the Canadian economy is faring well. The latest barometer on manufacturing sales exceeded expectations for a second consecutive month in December, rising 2.3% to $53.5 billion, reported Statistics Canada. The agency attributed the growth to higher sales of transportation equipment, petroleum and coal products.

There was similarly positive news south of the border supporting the idea of the Federal Reserve raising interest rates sooner rather than later. U.S. retailers had stronger sales in January than economists expected, and inflation at the consumer level was the highest in years.

The central bank raised rates in December for just the second time in a decade, after keeping rates at nearly zero to help lift the economy out of the Great Recession.

Some economists anticipate a hike can come as early as the Fed's next meeting in March.

"The Fed is behind the curve," said Norman Levine, managing director of Portfolio Management Corp. "Interest rates in the U.S. should already be higher than they already are, so the Fed is in a game of catch up. It's not leading."

Still, investors seemed buoyed by the idea of higher rates as Wall Street finished another record-breaking day. The Dow Jones industrial average rose 107.45 points to 20,611.86, the S&P 500 advanced 11.67 points to 2,349.25, and the Nasdaq composite added 36.87 points to 5,819.44.

The Canadian dollar was one low spot, down 0.03 of a U.S. cent to US76.48¢ amid weaker oil prices.

The March crude contract lost US9¢ at US$53.11 a barrel, while March natural gas nudged up US2¢ to US$2.93 per mmBTU.

April gold gained $7.70 at US$1,233.10 an ounce and March copper was unchanged at US$2.74 a pound.

With files from The Associated Press