TORONTO — Canada's main stock index moved to within one percentage point of an all-time high Monday despite some investor concern that corporate profits will decline in the first quarter.
The S&P/TSX composite index gained 11.14 points to 16,407.29. That's the highest level since Aug. 27 and just 160 points off the high set July 12.
The market appeared headed to breaking a five-day winning streak until it turned positive near the end of trading.
It was propelled by the key oil sector which gained 1.5 per cent as several producers shares rose. Crescent Point Energy Corp. led by closing up more than 12 per cent on the day.
The gains came as the price of West-Texas Intermediate reached its highest level since November as OPEC continues to curb output, along with the threat to output from unrest in Libya and sanctions on Venezuela and Iran.
The May crude contract was up US$1.32 at US$64.40 per barrel and the May natural gas contract was up 4.4 cents at US$2.71 per mmBTU.
"So broadly, oil prices are being supported by the view that global production could continue to be curbed a little bit. That's putting a little bit of a floor under oil at this stage," said Craig Fehr, Canadian markets strategist for Edward Jones.
Health care was the weakest sector on the TSX, losing 1.16 per cent as most cannabis producer shares fell, including Cannaroyalty Corp., Cronos Group Inc. and Aphria Inc.
The Canadian dollar traded at an average of 75.05 cents US compared with an average of 74.70 cents US on Friday.
The June gold contract was up US$6.30 at US$1,301.90 an ounce and the May copper contract was up 3.75 cents at US$2.93 a pound.
In New York, the Dow Jones industrial average was down 83.97 points at 26,341.02 as Boeing shares lost 4.4 per cent following an analyst downgrade. The S&P 500 index was up 3.03 points at 2,895.77, while the Nasdaq composite was up 15.19 points at 7,953.88.
Fehr expects investors will take a wait-and-see approach this week until Friday's start to first-quarter corporate earnings reports signals what the season will be.
"So I don't think it's unreasonable to expect that we could see markets kind of chop around over the balance of the week and wait for a little bit more direction from earnings reports," he said in an interview.
Fehr said markets are anticipating that earnings will be a little weaker without last year's support from U.S. corporate tax cuts.
Revenues should rise even though corporate earnings could fall for the first time since 2016. However, what could move markets is commentary from companies about their outlooks.
"In an environment where economic growth is likely to continue, albeit relatively subdued, it's reasonable that the outlook for earnings over the course of the year should still be reasonably positive," he said.
"But to the extent that the commentary is a little more sour here in the coming weeks that could represent at least a little bit of short-term risk for the markets."
In particular, investors will be watching for commentary about the outlook for consumer demand and investment.
"To the extent sectors or even particular companies are providing some commentary that suggests that there's a bit of consumer fatigue or some fatigue in the capital investment cycle, I think that would perhaps be a little more sour than what the markets are expecting at this stage."
Companies in this story: (TSX:CPG, TSX:CRZ, TSX:CRON, TSX:APHA; TSX:GSPTSE, TSX:CADUSD=X)