Big bounceback for index
The Canadian Press - May 13, 2022 - Business Buzz

Photo: The Canadian Press

Canada’s main stock index climbed Friday on a broad-based rally, bringing an end to what had been a six-day losing streak.

The S&P/TSX composite index closed up 400.14 points at 20,099.19.

In New York, the Dow Jones industrial average was up 466.36 points at 32,196.66. The S&P 500 index was up 93.81 points at 4,023.89, while the Nasdaq composite was up 434.04 points at 11,805.00.

The rally, which came after consecutive sessions of losses as investors worried about inflation, central bank rate hikes and overall economic uncertainty, lifted all industry sectors.

“Those beaten down tech stocks are definitely having a stronger day, but it’s across the board,” said Crystal Maloney, head of equity research at CIBC Asset Management. “All sectors are in the green, whether you’re looking at the TSX composite or the S&P 500.”

Tech stocks in particular have been hard-hit recently. North American investors have been retreating from riskier stocks and favouring safer high-yield bonds amid uncertainty about how far the U.S. Federal Reserve and other central banks may be willing to go to curb inflation.

But on Friday, risk appetite improved, likely partially due to comments from Federal Reserve Chair Jerome Powell on Thursday that appeared to indicate that consecutive 50-basis point rate hikes in June and July are more likely than a 75-basis point rate hike, Maloney said.

While hot inflation and the rising cost of living have been sources of pain for consumers, investors have been concerned about whether central banks can successfully reduce inflation without at the same time tipping the economy into recession.

“We don’t know where central banks will end up, nor where inflation will land. And one of the big questions is, can central banks curb inflation while engineering a soft landing,” she said.

The Canadian dollar traded for 77.20 cents US compared with 76.69 cents US on Thursday.

The June crude contract was up $4.36 at US$110.49 per barrel and the June natural gas contract was down 8 cents at US$7.67 per mmBTU.

The June gold contract was down US$16.40 at US$1,808.20 an ounce and the July copper contract was up eight cents at US$4.18 a pound.

All Business Buzz Stories