Toronto and U.S. stock markets rally after Irma damage less than expected
North American stock market indexes jumped Monday after Hurricane Irma weakened without causing as much damage as feared, while the loonie slowed its pace of recent gains.
On Bay Street, the Toronto Stock Exchange’s S&P/TSX composite index advanced 54.98 points to 15,040.30, with most sectors climbing.
In New York, the Dow Jones industrial average soared 259.58 points to 22,057.37. The S&P 500 index was up 26.68 points to 2,488.11 and the Nasdaq composite index gained 72.07 points to 6,432.26.
“I think today is really a bit of relief rally coming on the weakness from last week that we some in reaction to the anticipation of the hurricane over the weekend,” said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis.
“A good portion of today’s upside is just related to the fact that despite the clear devastation that the hurricane did cause, it was perhaps a little bit less than the expectations.”
Irma weakened shortly before it came ashore Sunday, and while the damage is still being assessed, insurers anticipate they won’t have to pay out as much in claims as it looked like they would last week.
Global investors were also relieved after a North Korean national holiday passed without any other actions that would raise tensions between that country and the U.S.
In currency markets, the Canadian dollar was trading at an average price of 82.45 cents US, up 0.02 of a U.S. cent.
While that’s the seventh straight day of gains for the loonie, Fehr said the dollar appears to be settling down after surging more than three cents U.S. over the past six sessions.
“We’ve seen a huge surge in the loonie over the last couple of months,” said Fehr, who attributed the upward movement to the Bank of Canada hiking interest rates twice in two months and U.S. data suggesting the Federal Reserve may not be quite as aggressive with upcoming rate hikes and winding down its balance sheet.
“I think now we’ve found a point where the market is just gaining a little bit of a footing after some of these expectations recalibrated,” he said. “So I wouldn’t be surprised to see the loonie flatten out a bit from here.”
In another sign investors were willing to take more risks, the December gold contract fell $ 15.50 to US$ 1,335.70 an ounce.
Elsewhere in commodities, the October crude contract advanced 59 cents to $ 48.07 US per barrel.
The October natural gas contract gained six cents to $ 2.95 US per mmBTU and the December copper contract added two cents to $ 3.07 US a pound.
CBC | Business News