TORONTO — Financial companies gave the Toronto stock market a slight push into positive territory Friday as New York indexes also advanced despite tepid news on the U.S. economy.
The S&P/TSX composite index added a mere 9.13 points to 13,838.10 as it gave back about one per cent overall in a trading week shortened by the Thanksgiving holiday.
Ahead of the federal election on Monday, the Canadian dollar fell 0.39 of a U.S. cent to 77.45 cents US.
Norman Raschkowan, senior partner at Sage Road Advisors, said election results will have a noticeable impact on the currency next week as traders assess what the outcome means for Canada's economy.
The country has faced a significant decline in the performance of the energy sector this year, and a report from one major credit rating agency suggests the climate is only worsening for Canadian energy companies while oil and gas prices hold below US$50 a barrel.
Standard and Poor's has taken “negative rating actions” on two big companies — Cenovus Energy (TSX:CVE) and Husky Energy (TSX:HSE) — as part of a larger list. The restrained outlook appeared to have no immediate impact on either company's stock, both of which closed higher.
But the outlook raises further questions about how Canadian companies fared in the third quarter of the year, as financial results begin in earnest over the next two weeks.
“I think people are generally prepared for some weak results,” said Raschkowan.
“The earnings will be one thing, but the real question will be how many companies are suddenly going to face difficulties from a financing standpoint.”
On the TSX, financials stocks gained 0.5 per cent with the country's five biggest banks higher.
The health care sector lifted 2.1 per cent as Valeant Pharmaceuticals (TSX:VRX), one of Canada's most valuable companies, recovered some of its steep declines from the previous session. The company said Thursday it had been subpoenaed by U.S. federal prosecutors seeking information on its drug pricing, distribution and patient assistance program.
Valeant shares gained five per cent, or $10.67, to $227.40.
On Wall Street, the Dow Jones industrial average was up 74.22 points at 17,215.97, the S&P 500 rose 9.25 points to 2,033.11 and the Nasdaq added 16.59 points to 4,886.69.
Earlier in the day, the Federal Reserve reported that U.S. manufacturing production fell for the second straight month in September.
Meanwhile, the U.S. Labor Department reported that employers advertised fewer job openings in August — 5.4 million versus a record high 5.7 million in July — and kept hiring flat, another sign the American jobs market has lost strength since spring.
In commodities, the November contract for benchmark crude oil rose 88 cents to US$47.26 a barrel, closing out a week where the price declined five per cent on signs that oversupply is still a problem.
November natural gas gave back two cents to US$2.43 per thousand cubic feet while December gold fell $4.40 to US$1,183.10 an ounce.