Major Canadian stock index posts second day of gains after Monday’s drop

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The main Canadian stock index posted a second day of gains on Wednesday as investors regained confidence after a turbulent start to the week.

The S & P / TSX Composite Index gained 145.18 points to 21,070.05.

In New York, the Dow Jones Industrial Average was up 261.19 points to 35,753.89. The S&P 500 Index gained 47.33 points to 4,696.56 while the Nasdaq Composite was up 180.81 points to 15,521.89.

The second day in a row of gains was good news after what had been a North American market slump on Monday, sparked by fears of tightening restrictions around the world in response to the rising number of cases of the news. Omicron variant.

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Mike Archibald, vice president and portfolio manager at AGF Investments Inc., said the rebound since then in sectors affected by the pandemic like airlines, cruise lines and hotels shows that investors are now less concerned that they are were not about Omicron’s potential impact on the economy.

“It seems to be accepted that cases of the virus are likely to increase, possibly on a global scale, but at least at this point, hospitalization data and associated deaths are not increasing at the same rate that we have seen. in previous outbreaks, “Archibald said. . “It’s really the difference in my mind these last few days.”

The S & P / TSX Capped Energy Index rose 1.2 percent on Wednesday, as oil stocks rallied along with crude oil prices after a larger-than-expected drop in US stocks.

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The February crude contract rose 1.64 cents to US $ 72.76 per barrel and the March natural gas contract rose 7 cents to US $ 3.71 per mmBTU.

Gains in the energy sector also boosted the Canadian dollar, which traded at 77.73 US cents from 77.36 US cents on Tuesday, Archibald said.

The February gold contract was up US $ 13.50 to US $ 1,802.20 an ounce and the March copper contract was up four cents to US $ 4.39 per pound.

Risky and growing sectors, such as tech, also received a boost on Wednesday. The S & P / TSX Capped Information Technology Index rose 0.67 percent.

Besides Omicron, other factors boosted confidence in the market: the new better-than-expected US GDP and core inflation figures released on Wednesday.

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Plus, December is generally a more positive time of year for markets, Archibald added.

“There is definitely a certain seasonality to it. We are in the good part of the year where generally tax loss sales have declined and the market generally tends to be doing quite well by the start of January, ”he said.

Overall, Archibald said it’s clear traders are feeling more optimistic than they were just two days ago, though it’s still unclear what Part 1 of 2022 will bring.

“Obviously, until we go into January and start seeing fourth quarter results, we won’t know for sure,” he said. “But certainly the action over the past 24 hours has been quite constructive, in my mind.”

The February gold contract was up US $ 13.50 to US $ 1,802.20 an ounce and the March copper contract was up four cents to US $ 4.39 per pound.

This report by The Canadian Press was first published on December 22, 2021.

Companies in this story: (TSX: GSPTSE, TSX: CADUSDX)