A broad-based rally helped Canada’s largest stock index close with a triple-digit gain Thursday, while U.S. stock markets also saw strong gains.
The North American stock market gains came as strong earnings growth, especially in the U.S., started to outweigh recent political concerns, said Allan Small, a senior investment adviser at HollisWealth.
“Finally, finally, and I say finally for the third time, corporate earnings are making a difference. We were expecting earnings, especially in the U.S., about 17%, 18% growth, and they’re actually coming at about 20% growth this past quarter,” he said.
“When you have a situation where there are no political headlines coming out of either Washington or somewhere else in the world, investors can focus on earnings, and they’ve been fantastic,” said Small.
The S&P/TSX composite index closed up 127.84 points at 15,637.59, led by base metals and financials.
In New York, the Dow Jones industrial average closed up 238.51 points at 24,322.34. The S&P 500 index closed up 27.54 points at 2,666.94 and the Nasdaq composite index ended up 114.94 points at 7,118.68.
U.S. technology stocks saw strong gains after earnings reports, with Facebook surging 9.1%, Amazon up 4%, and Alphabet hitting a 2% gain.
Stocks in the U.S. were also boosted after the 10-year treasury yield saw a small retreat after a rise earlier this week spooked equity investors.
Small said he was still not overly concerned with the bond rate at around 3%.
“I don’t believe the world comes to an end at 3%,” he said. “I still don’t believe the rate is high enough to challenge some of these stocks, in terms of the difference between bond rate and a dividend.”
The Canadian dollar averaged US77.75¢, down 0.04 of a U.S. cent.
The June crude contract closed up US14¢ at US$68.19 per barrel and the June natural gas contract ended up US3¢ at US$2.84 per mmBTU.
The June gold contract ended down US$4.90 at US$1,317.90 an ounce and the July copper contract was down US2¢ at US$3.14 a pound.
Husky Energy Inc. saw it’s share price close down $1.55, or 8.12%, to $17.54 after an explosion at its Wisconsin refinery sent several people to hospital.