January 7, 2021 By Ross Marowits, The Canadian Press
Canada’s main stock index was within reach of a record high as cannabis and renewable energy stocks got a lift from Democrats winning control of the U.S. Senate and crude oil closed above US$50 a barrel.
The S&P/TSX composite index ended Jan. 6 up 145.60 points to 17,828.11. It moved to within 46 points of last February’s peak of 17,970.51 in earlier trading.
“We’re getting pretty close but aside from the tech stocks across the board positive for Canada today on all the sectors,” said Michael Currie, vice-president and investment adviser at TD Wealth.
“So if the trend continues, it should be hitting a new record any day now.”
In New York, the Dow Jones industrial average surged 437.80 points to 30,829.40 after earlier surpassing 31,000. There was anticipation that Democratic control of Congress and the White House will result in increased government spending.
The market slipped a little toward closing after the U.S. Capitol was evacuated following protests in Washington, D.C. The city also imposed a 6 p.m. curfew.
The S&P 500 index was up 21.28 points at 3,748.14 after earlier setting another record high.
Investors have traditionally preferred gridlock – which would likely limit corporate tax increases – but they seemed to be OK with the prospect of higher spending and increased interest rates, said Currie.
“Usually when there’s that much uncertainty, it’s usually negative for the markets but they’re definitely taking it as a positive today.”
Democratic Senate candidate Raphael Warnock and Jon Ossoff were declared winners in two Georgia races.
The Nasdaq composite lost 78.17 points at 12,740.79 on concerns that the Biden administration might be willing to break up large tech companies.
Canada’s tech sector lost 1.8 per cent with Docebo Inc. down 5.4 per cent and Shopify Inc. 2.6 per cent lower.
Healthcare led the nine major sectors that moved higher on the belief that incoming U.S. President Joe Biden would be more open to legalizing cannabis. It surged 5.9 per cent with shares of Cronos Group Inc. up 14.2 per cent, Aphria Inc. up 11.8 per cent, Canopy Growth Corp. up 11.5 per cent.
The Canadian dollar traded for 78.83 cents U.S. compared with 78.70 cents U.S. on Jan. 5.
Materials increased even as gold prices slipped from a two-month high earlier in the day.
The February gold contract was down US$45.80 at US$1,908.60 an ounce and the March copper contract was up 1.1 cents at US$3.65 a pound.
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