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Stocks Stay Afloat on Energy Prices

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Equities in Canada’s largest centre rose on Tuesday as higher commodity prices helped energy and mining ...


Equities in Canada’s largest centre rose on Tuesday as higher commodity prices helped energy and mining shares lead the market higher.

The S&P/TSX Composite Index came off their highs of the day, but stayed afloat 35.16 points to pause for lunch hour at 15,763.48

The Canadian dollar strengthened 0.37 cents to 80.01 cents U.S.

Saudi Arabia has cut November allocations by 560,000 barrels per day, in line with its commitment to a supply reduction pact led by the Organization of the Petroleum Exporting Countries. In the United States, some production remains offline following Hurricane Nate, lending additional support.

Thus, petroleum and gas companies were among the biggest contributors to the index’s gains, including Canadian Natural Resources which climbed 1.5% to $41.73, and Encana Corp, which advanced 2% to $14.37.

Kirkland Lake Gold Inc jumped 5.6% to $18.43, while Goldcorp was up 1.2% to $16.865.

The financial services sector, which accounts for about a third of the index’s weight, added strength. Manulife Financial Corp rose 0.9% to $25.65.

On the down side, Ritchie Bros Auctioneers fell 6.4% to $34.82 after several analysts cut their price targets on the company after it published its September auction metrics, which were lower than expected.

Online retail platform Shopify Inc extended its slide, which began last week after short seller Citron Research made critical comments about the company. Shopify shares fell 3.5% at $118.62.

On matters economic, Statistics Canada reported Canadian municipalities issued $7.5 billion worth of building permits in August, down 5.5% from July. This was the second consecutive monthly decrease.

Despite these declines, says the agency, the year-to-date value of building permits is up 8.7% compared with the same period in 2016.

Elsewhere, Canada Mortgage and Housing Corporation revealed the trend in housing starts was 214,821 units in September, compared to 220,573 units in August.

ON BAYSTREET

The TSX Venture Exchange gained 3.07 points to move into noon hour at 790.82.

All but three of the 12 TSX subgroups reached noon in the green, with energy gushing 0.7%, health-care improving 0.6%, while utilities moved higher 0.4%.

The three laggards were information technology, down 0.6%, consumer discretionary stocks, off 0.2%, consumer staples, sliding 0.1%.

ON WALLSTREET

U.S. stocks rose to record highs after Wal-Mart announced a large buyback and Honeywell said it was splitting into two. Pfizer also contemplated a spin-off as Corporate America looked for ways to keep investors happy and keep this eight-year bull market going.

The Dow Jones Industrials took on 32.18 points to 22,793.25, an all-time peak. Wal-Mart contributed the most to the gains.

The S&P 500 gained 1.09 points to 2,545.82, with consumer staples among the best-performing sectors. The index also notched a record intraday high.

The NASDAQ dove 15.01 points from Friday’s record high to 6,564.95

Retail giant Wal-Mart announced a $20-billion U.S. buyback before the bell and reiterated its earnings outlook for the current fiscal year. The company also said it plans to add 1,000 online grocery pickup locations at its U.S. stores in fiscal 2019. The news sent the Dow component more than 4% higher.

Pfizer, another Dow component, said Tuesday it was thinking about selling or spinning off its consumer health-care business, which generates $3.4 billion U.S. in annual sales. Pfizer's stock rose approximately 0.5%.

Meanwhile, Honeywell announced it plans to spin off its Home Products and Transportation Systems businesses into two separate public companies by the end of next year.

BlackRock, the largest asset manager in the world, is set to report third-quarter earnings and revenue Wednesday before the bell. Big banks such as Citigroup, JPMorgan Chase, Bank of America and Wells Fargo are scheduled to report later this week.

S&P 500 third-quarter earnings are expected to grow 4% on a year-over-year basis

Elsewhere, Procter & Gamble shares pulled back 2% after shareholders voted against adding Trian's Nelson Peltz to its board of directors.

This round of corporate news comes as most major companies get set to release their quarterly results.

Prices for the benchmark 10-year Treasury note gained ground, raising yields to 2.33% from Monday’s 2.37%. Treasury prices and yields move in opposite directions.

Oil prices gained $1.36 a barrel to $50.94 U.S.

Gold prices gained $9.20 to $1,294.20 U.S. an ounce