The TSX, S&P 500 and the Dow indexes ended higher on Monday amid a largely upbeat earnings season, while the Nasdaq came under pressure from declines in some high-flying growth stocks, as the rotation into cyclical and “reopening” stocks continued.
In Toronto, energy and materials stocks enjoyed particularly strong gains - with both sectors rallying more than 3%. The S&P/TSX Composite Index closed up 104.83 points, or 0.55%, at 19,213.16.
While most metals stocks did well within the materials sector, it was uranium names that were among the best gainers. Nexgen Energy rose 13.79% and Cameco just over 10%. The uranium sector has been on an uptrend thank to improving supply and demand dynamics and the push globally for environmentally friendly energy stocks.
Shopify saw its third straight day of losses after its big rally Wednesday following its earnings report. The stock dropped 5.23%.
Investors in Canada are bracing for a heavy week of earnings ahead. Among them are RioCan REIT, Thomson Reuters, Barrick Gold, Stelco, Suncor, Maple Life Foods, Bombardier, Cineplex, Magna International, West Fraser, Air Canada, Cameco, TC Energy, Hydro One, and several of the Brookfield entities.
Oil rose more than 1% as Chinese economic figures and U.S. vaccination rates pointed to a strong rebound in demand in the world’s two largest economies. Investors remain wary, however, over record-breaking infection rates in India, the third-largest fuel importer worldwide, along with higher OPEC+ oil supply.
Brent crude rose 80 cents, or 1.2%, to settle at $67.56 a barrel. U.S. West Texas Intermediate rose 91 cents, or 1.4%, to settle at $64.49 a barrel.
Gold prices also jumped more than 1%, with the rally spilling over into other precious metals as well, driven by a retreat in the U.S. dollar and U.S. Treasury yields. U.S. gold futures settled 1.4% higher at $1,791.80.
Elsewhere, auto catalyst metal palladium rose 1% to $2,962.94 per ounce, after hitting an all-time high of $3,007.73 on Friday. Silver gained 3.6% to $26.84 per ounce after hitting $26.98, its highest mark since March 1. Platinum rose 2.6% to $1,229.84.
On Wall Street, economy-sensitive cyclical S&P 500 sectors such as consumer staples, energy, and materials outperformed sectors housing growth stocks, including technology and communication services.
“All of those names that are having outsized gain today are as a result of economic reopening optimism, and people getting out of the house spending money on things,” said Michael James, managing director of equity trading at Wedbush Securities.
Unofficially, the Dow Jones Industrial Average rose 0.71% to end at 34,113.89 points, while the S&P 500 gained 0.27% to 4,192.65.
The Nasdaq Composite dropped 0.48%, to 13,895.12.
“We’ve seen a slight change in the pace of value stocks outperforming growth stocks year-to-date,” said Rod von Lipsey, managing director at UBS Private Wealth Management.
The Nasdaq index fell as megacap technology stocks, including Amazon.com Inc, Alphabet Inc, Facebook Inc and Microsoft Corp, traded lower despite largely upbeat results.
The stocks have struggled to maintain the upward trajectory coming into reporting season. Chipmakers also fell, with the Philadelphia SE Semiconductor index down.
With more than half of S&P 500 companies having reported so far, profits are now seen rising 46% in the first quarter, compared with forecasts of 24% growth at the start of April, according to IBES data from Refinitiv. About 87% of the companies have come also reported earnings per share ahead of analysts’ estimates.
“This is now the fourth straight quarter of earnings just absolutely crushing estimates,” said Ross Mayfield, investment strategy analyst at Baird. “I think there just continues to be an underestimation of how strong this rally and how strong the economy is rebounding.”
Strong earnings, improving economic data, fiscal stimulus and the Federal Reserve’s ultra accommodative stance have supported markets, pushing the S&P 500 and the Nasdaq indexes to record levels last week.
U.S. manufacturing activity grew at a slower pace in April, likely constrained by shortages of inputs amid pent-up demand due to rising vaccinations and massive fiscal stimulus.
The Labor Department’s non-farm payrolls data, slated to be released on Friday, is expected to show a rise in job additions in April.
Gap Inc was one of the biggest gainers on S&P 500 on Monday. The largest decliner was Estee Lauder after the cosmetics maker missed analysts’ estimates for third-quarter sales.
On the Nasdaq 100 the largest gainer was Moderna Inc , which rose after the drugmaker said it will supply 34 million doses of its COVID-19 vaccine this year to the global COVAX program.
Tesla Inc fell as industry sources told Reuters the electric-vehicle maker, under scrutiny in China over safety and customer service complaints, is boosting its engagement with mainland regulators and beefing up its government relations team.
T-Mobile, Uber, Lyft, Square, Peloton and Pfizer are poised to report results later this week in the U.S.
Read more: Stocks that saw action Monday - and why
With files from Reuters
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Darcy Keith