Tech-driven rally boosts U.S. and Toronto indexes, loonie above 76 cents US

Tech-driven rally boosts U.S. and Toronto indexes, loonie above 76 cents US
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TORONTO — A technology-driven rally on markets in the United States spilled across the border to boost the tech sector in Canada and help drive the country’s main stock index higher on Wednesday.

The S&P/TSX composite index closed up 172.49 points at 16,789.97, back on an upward track after slipping lower on Tuesday, as the loonie jumped to 76.02 cents US compared with 75.79 cents US the previous day.

In New York, the Dow Jones industrial average was up 83.48 points at 28,331.92.

The S&P 500 index closed ahead by 35.11 points at 3,478.73, while the Nasdaq composite rose 198.59 points at 11,665.06.

“It’s green right across the screen in New York and Toronto, which is nice to see,” said Michael Currie, vice-president and investment adviser at TD Wealth.

“Toronto has been lagging for a little while here. A little more broadening of the sectors, too.”

The biggest market-moving story of the day was that of Inc., whose shares were up more than 26 per cent on the New York Stock Exchange to US$272.32 on Wednesday, Currie said.

On Tuesday, the San Francisco-based company reported earnings that far exceeded expectations. It has been added to the Dow Jones Industrial Average, set to replace oil major Exxon Mobil when trading in the measure of 30 blue-chip stocks begins on Monday.

The results from and other big U.S. tech companies prove the COVID-19 pandemic’s influence on the demand for technological solutions is real, Currie said.

“It just lends a little credence to all these tech stocks that have been doing so fantastic, surprising a lot of people, but when the numbers come out, a lot of them are really putting up the numbers to back it up,” he said.

“Salesforce is one of those companies that is really in the work-from-home area, companies that want to get people set up at home, want to do more off-site tech stuff.”

The technology sector in Toronto rose 3.34 per cent on Wednesday, led by Shopify Inc., up $69.30 or five per cent to $1,434.41, Blackberry Ltd., up 40 cents or 6.35 per cent at $6.70, and Photon Control Inc., up nine cents or 5.6 per cent to $1.69.

The materials and financial sectors also gained, up 2.25 per cent and 1.73 per cent, respectively.

The December gold contract was up US$29.40 at US$1,952.50 an ounce, supporting high-volume trading in B2Gold Corp., which rose 36 cents, or 4.39 per cent, to $8.56.

Bank stocks rose after the Royal Bank of Canada and National Bank of Canada both reported third-quarter results that exceeded analyst expectations.

Royal Bank shares rose $1.48 to $101.40, National was up $2.95 to $71.00 and Bank of Montreal, which reported an earnings beat on Tuesday, jumped $2.33 to $83.56.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce will wrap up the major bank earnings when they report Thursday morning.

Currie said gold is strengthening ahead of a speech by U.S. Federal Reserve chairman Jerome Powell on Thursday where he is expected to announce a strategy to get the post-pandemic economy rolling that could result in higher inflationary pressure.

The sector that performed the worst in Toronto on Wednesday was energy, down 2.25 per cent, despite the October crude contract rising four cents to US$43.39 per barrel.

Industry figures showed a decline in stored crude inventories, a positive for pricing, as production from Gulf of Mexico wells was taken offline as a precaution due to the impending threat of Hurricane Laura.

The October natural gas contract was down 2.2 cents to just over US$2.57 per mmBTU on Wednesday and the September copper contract was up almost three cents at US$2.96 a pound.

By Dan Healing in Calgary.

This report by The Canadian Press was first published Aug. 26, 2020.

Companies in this story: (TSX:SHOP, TSX:BB, TSX:PHO, TSX:BTO, TSX:RY, TSX:NA, TSX:BMO, TSX:CM, TSX:TD)


The Canadian Press

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