TORONTO – Traders looked to corporate earnings for direction Tuesday as the Toronto stock market advanced for a fifth straight day, while shares in Quebec drugmaker Valeant Pharmaceuticals soared.
The S&P/TSX composite index climbed 45.61 points to 14,801.23. The health-care sector led advancers, jumping by six per cent, followed by notable gains in consumer staples and gold stocks.
Valeant (TSX:VRX) saw its stock rise by nearly 25 per cent, adding $7.37 to $36.88, after the company confirmed that it plans on sticking to its earnings guidance despite reporting a wider second-quarter loss.
The company’s share price is still far below its 52-week high of $333.44 a year ago, when it was one of Canada’s most valuable publicly traded companies.
Meanwhile, indices in New York were mostly flat amid a dearth of economic news.
The Dow Jones industrial average was up 3.76 points at 18,533.05 while the broader S&P 500 composite index was ahead 0.85 points to 2,181.74.
The tech-heavy Nasdaq composite set an all-time record, settling at 5,225.48, a rise of 12.34 points.
Todd Mattina, chief economist with Mackenzie Investments, says traders have been confident in North American stock markets lately because of easy monetary policies from global central banks.
The notion that stimulus will continue to flow was supported again on Tuesday after China released weak consumer price figures, inciting expectations that the country may inject more stimulus into its economy.
“There’s speculation that in China stimulus will be needed over the course of the year,” said Mattina.
China’s consumer price index rose 1.8 per cent last month over a year earlier, slower than June’s 1.9 per cent.
The July figure is the third monthly drop in a row since April, when the consumer price index reached its highest level since July 2014.
It also was below the government’s three-per-cent inflation target. The news came a day after China reported exports fell in July and increased investors’ expectations of more stimulus measures from Beijing to soften the economy’s slowdown.
Mattina noted that Chinese stimulus may help commodity prices, including copper, if the money goes towards major infrastructure projects.
September copper contracts fell a cent to US$2.15 a pound, while December gold contracts rose $5.40 to US$1,346.70 an ounce. September natural gas fell 13 cents to US$2.61.
The Canadian dollar was able to chalk up a gain, adding 0.23 of a cent to 76.20 cents US despite lower crude prices.
The September crude contract was down 25 cents at US$42.77 per barrel as hopes of a possible production cap or cut from OPEC faded away.
Crude prices had rallied on Monday, after the Organization of the Petroleum Exporting Countries said it will hold a meeting of oil ministers in September, two months ahead of schedule.
The move was seen as unusual because the group rarely comes together outside of regularly scheduled meetings, leading investors to speculate about a possible impending output freeze.
— With files from The Associated Press
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