As the TSX pushed higher at the close Thursday, New York indices hit record levels amid positive US unemployment data and strong quarterly results from retailers.
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Oil prices rose almost 2 per cent, supporting the rally, after the International Energy Agency forecast crude markets would rebalance in the next few months. The retailers’ earnings fueled optimism for the US government’s latest monthly tally of retail sales Friday. The S&P 500 index added 10 points, or 0.5%, to 2,186. The Nasdaq composite index lost one point to 5,227.
A rally since late June has pushed the S&P 500 up more than 6 per cent in 2016 as low interest rates encourage investors to buy U.S. equities, although high valuations are of concern to many. The broader Standard & Poor’s 500 stock index was off 0.1% and the technology-dominated Nasdaq composite was down 0.1%.
The energy index fell 1.41 percent, hurt by a drop in oil prices after the USA government reported a surprise crude stockpile build.
Earlier, Japan’s Nikkei 225 lost 0.2 percent despite a report showing private sector machinery orders rebounded in June from May. Steel products manufacturer Nucor fell $1.66, or 3.2 percent, to $50.69, while Alcoa slipped 25 cents, or 2.4 percent, to $10.17.
The S&P 500 is down 7.38 points, or 0.3 percent. Nordstrom rose 7.23% ahead of its results after market closes, while J.C. Penney, which reports on Friday, surged 9.34%. Tiffany rose $2.31, or 3.6 percent, to $65.98. Devon Energy added 4.4%, while Chesapeake Energy rose 4.8%.
“Oil is increasingly pulling back towards the $40 a barrel level again and many in the markets are concerned that the shorts may even be looking for prices to drop down toward the $35 level”, Angus Nicholson, a market analyst in Melbourne at IG Ltd., said in an e-mail to clients. Australian bonds gained after Treasuries rose, and copper futures climbed for a second day. The S&P 500 is now priced at about 17 times expected profits, compared with a 10-year average of 14 times, according to Thomson Reuters data. Kimco Realty slid 72 cents, or 2.3 percent, to $30.35. Britain’s FTSE was down 0.1 percent. Brent crude, used to price global oils, was up 40 cents, or 0.9 percent, at $46.44 a barrel in London.
Commodity-sensitive shares were supported by a more than 4% rally in oil prices after an OPEC official gave strong indication that producers would try to stabilize crude prices at an informal meeting next month in Algeria. In currency markets, the dollar weakened to 101.19 yen from 101.90 yen, and the euro strengthened to $1.1179 from $1.1107.
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Other commodities were mixed with the September natural gas falling a penny to US$2.55 per mmBTU, December gold contracts dropped $1.90 to US$1,350 an ounce and September copper contracts rose two cents to US$2.19 a pound.
