S&P/TSX Composite Rises as U.S. Markets Decline

Rosa Saba, The Canadian Press

TORONTO — On Wednesday, Canada's primary stock index saw an increase, largely due to robust performances in the telecommunications and utilities sectors. Meanwhile, stock markets in the United States experienced a decline as investors positioned themselves ahead of the Thanksgiving holiday.

The S&P/TSX composite index ended the day up by 83.16 points, reaching a closing figure of 25,488.30.

In contrast, notable declines were observed in New York's major indices. The Dow Jones industrial average dropped by 138.25 points, landing at 44,722.06. The S&P 500 index saw a decrease of 22.89 points to settle at 5,998.74, while the Nasdaq composite fell by 115.10 points, closing at 19,060.48.

Market analysts noted that several new economic data points revealed the U.S. economy is maintaining a healthy pace. Anish Chopra, managing director at Portfolio Management Corp, commented, “The U.S. economy is doing quite nicely,” highlighting the economy's strength alongside inflation rates that are nearing the U.S. Federal Reserve’s target.

In October, the personal consumption expenditures index, a key inflation indicator, rose to 2.3 percent. Despite this increase, Chopra mentioned that it is still largely consistent with the expectations set by the Federal Reserve.

The U.S. economy also recorded an annual growth rate of 2.8 percent in the third quarter, driven by strong consumer spending and export activity. Following a successful November, investors appeared to be taking profits before the extended Thanksgiving weekend, with U.S. markets set to close on Thursday and operate for a half-day on Friday.

The technology sector weighed heavily on market performance, with disappointing earnings reports from companies such as Dell and HP. Major tech stocks like Nvidia also saw declines, contributing to the Nasdaq's leading drop among the major indices. Additionally, Nordstrom's announcement of weak sales outlook further impacted investor sentiment.

“There’s some disappointing earnings across a few specific companies,” Chopra added. He noted that downturns in the tech sector typically influence the broader indices significantly.

Overall, the earnings season has shown to be strong, a sentiment reflected in the recent economic data. Chopra mentioned, “I think what the market is now looking towards is the policies of the incoming government administration,” particularly the proposed tariffs by president-elect Donald Trump. He cautioned that these measures could be inflationary, potentially shifting the Federal Reserve’s course concerning interest rate adjustments.

Since September, the central bank has initiated rate cuts, adopting a second reduction in November and is generally expected to continue this trend in December.

In the currency market, the Canadian dollar strengthened, trading at 71.25 cents U.S., an increase from Tuesday's 71.01 cents U.S.

Commodity prices displayed mixed results, with the January crude oil contract falling by five cents to settle at US$68.72 per barrel, while the January natural gas contract dropped by 27 cents to US$3.20 per mmBTU. On the other hand, February gold futures increased by US$18.50, reaching US$2,664.80 an ounce, while the March copper contract rose by two cents, closing at US$4.14 a pound.

— With files from The Associated Press

Stocks, Markets, Economy