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North American stock markets push higher, loonie also gains ground

Last Updated Feb 23, 2018 at 5:20 pm EDT

TORONTO – North American stock markets pushed higher Friday as a broad-based rally helped lift Canada’s main stock index.

The S&P/TSX composite index was up 130.28 points to 15,638.45. A surging energy sector led the advance.

In New York, the Dow Jones industrial average was up 347.51 points to 25,309.99. The S&P 500 index was up 43.34 points to 2,747.30 and the Nasdaq composite index was up 127.30 points to 7,337.39.

“The market is benefiting from the fact that as we’ve gotten through this February flop we’ve had a return to rationality and a focus on fundamentals,” said Jamie Robertson, managing director of the portfolio solutions group at Manulife Asset Management. “I think the market’s appetite for volatility is exhausted.”

The tumult that saw global equity markets begin to fall at the beginning of February was triggered by U.S. jobs data that showed wages grew more than anticipated, raising worries that signs of higher inflation might push the U.S. Federal Reserve to increase interest rates more quickly. Markets have since bounced back but have been at the mercy of investor’s changing opinions day-to-day on inflation and the Fed.

Higher yields generally hurt stock prices by making bonds more appealing to investors.

A continued pullback in bond yields from the four-year highs reached earlier this week likely also gave equity investors a shot of confidence on Friday. The yield on U.S. 10-year Treasury notes fell to 2.87 per cent.

In currency markets, the Canadian dollar reversed its week-long slide, closing at an average trading value of 78.94 cents US, up 0.26 of a U.S. cent.

Robertson attributed the correction to a more positive outlook for oil, as the April crude contract rose 78 cents to US$63.55 per barrel.

“The Canadian dollar is always a push and pull between interest rates and oil prices,” he said.

Elsewhere in commodities, the April natural gas contract was down two cents at US$2.66 per mmBTU.

The April gold contract was down US$2.40 to US$1,330.30 an ounce and the March copper contract was down three cents to US$3.21 a pound.