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S&P/TSX composite, Dow Jones and S&P 500 set record highs as mood rises on economy

·4 min read

TORONTO — Broad-based optimism lifted Canada's main stock index to a record close on Thursday as U.S. markets also pushed higher on news suggesting a strong recovery from the pandemic slump.

The S&P/TSX composite index was up 150.26 points at 19,321.92 with eight of 11 sectors in positive territory.

In New York, the Dow Jones industrial average jumped 305.10 points to a record high of 34,035.99 — its first close above 34,000 — and the S&P 500 index was up 45.76 points to a new record of 4,170.42.

The Nasdaq composite was up 180.92 points at 14,038.76.

"We're in full recovery mode," said Michael Currie, vice-president and investment adviser at TD Wealth.

"Everyone is extremely optimistic. We're seeing good news out of housing, interest rates are staying low and dropping, oil's going up because we're seeing increased demand."

The Canadian Real Estate Association released statistics on Thursday showing sales of existing homes in Canada hit another all-time high in March, while new listings rose to their highest level on record in seasonally adjusted terms, and prices continued to rise.

South of the border, U.S. retail sales jumped 9.8 per cent in March from February, blowing past economists’ forecasts for 5.5-per-cent growth.

Much of the surge was attributed to $1,400 payments hitting household bank accounts from the U.S. government’s latest economic rescue effort.

Another U.S. report showed 576,000 people applied for unemployment benefits last week, well below the 700,000 that economists had forecast and down from 769,000 the prior week.

Adding to the optimism, more big U.S. companies reported profits for the first three months of 2021 that were healthier than analysts had forecast.

"We had big companies in the States, mostly banks, coming out and saying business is great," said Currie.

"Even the tech stocks, which have been a little wobbly for the past month or two, they're looking good. Bond yields are dropping ... pretty much everything a bull would want to see seems to be happening. The recovery is in full swing."

Canadian manufacturing sales fell 1.6 per cent in February as the auto sector faced a shortage of microchips that forced some assembly plants to ramp down production or shut down, Statistics Canada reported Thursday.

It said manufacturing totalled $55.4 billion on lower sales of transportation equipment, offset in part by higher sales in the petroleum and coal product, chemical, and wood product industries.

The Canadian dollar traded for 79.81 cents US compared with 79.79 cents US on Wednesday, a rise that Currie said was likely more due to weakness in the greenback over inflation concerns in the United States than because of higher oil prices.

The June crude contract was up 29 cents at US$63.51 per barrel and the May natural gas contract was up four cents at US$2.66 per mmBTU.

The June gold contract also rose, up US$30.50 at US$1,766.80 an ounce, and the May copper contract was up nine cents at US$4.22 a pound.

"It's a little odd that gold would be going up in this situation because it tends to do a little bit better when things aren't so great, but what's happening is because things are so good, there are people concerned about the threat of inflation," said Currie.

The top performing sector in Toronto was materials, led to a 3.11 per cent gain by mining companies.

Fortuna Silver Mines Inc. rose 7.09 per cent, Hudbay Minerals Inc. was up 6.68 per cent and B2Gold Corp. posted a gain of 6.66 per cent.

The worst sector performance came from health care, dragged down by cannabis companies.

Aphria Inc. fell 4.49 per cent and Organigram Holdings Inc. was off by 4.32 per cent.

— By Dan Healing in Calgary.

This report by The Canadian Press was first published April 15, 2021.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X, TSX:FVI, TSX:HBM, TSX:BTO, TSX:APHA, TSX:OGI)

The Canadian Press