Technology sector propels stock markets to positive start to September - InfoNews

Vernon News and Business Directory

Current Conditions

13.7°C

Technology sector propels stock markets to positive start to September

A TSX tote board is pictured in Toronto, on Dec.31, 2012. THE CANADIAN PRESS/Frank Gunn
September 01, 2020 - 1:39 PM

TORONTO - The technology sector propelled North American stock markets to a positive start to September with Shopify Inc. hitting a record high on the TSX.

Canada's largest company by market capitalization surged 6.7 per cent, as the sector climbed 3.8 per cent overall, with Kinaxis Inc. up 7.9 per cent and BlackBerry Ltd. nearly 7.1 per cent higher.

In the U.S., the S&P 500 and the Nasdaq composite closed at record highs as shares of Netflix Inc., Apple Inc. and Zoom Video Communications Inc. rose.

A continued surge for technology was one of the main themes Tuesday, said Kevin McLachlan, portfolio manager at Fiduciary Trust Canada, part of Franklin Templeton Canada.

"These companies were less affected by the pandemic lockdowns and the economic slowdown and as a matter of fact, their businesses have in many cases benefited because people are using technology...to continue to work from home, to connect with people."

Low interest rates are also supportive of technology stocks.

"They benefit from the fact that it's hard to find growth in other sectors," McLachlan said in an interview.

He warned, however, that some investors are growing concerned about valuations of some tech companies because of how fast they've appreciated in a short period of time.

Also supporting Tuesday's market moves was good manufacturing data in North America, China and Europe.

The IHS Markit Canada Manufacturing Purchasing Managers' index (PMI) rose to a seasonally adjusted 55.1 in August.

Domestic manufacturing activity accelerated to its fastest pace in two years, supporting hopes for the economic recovery.

In the U.S., factory activity expanded for the third straight month to 56.0 in August.

"Globally we're definitely seeing a rebound in manufacturing. I think that's got to contribute to the positive tone," McLachlan said.

Nonetheless there remains a concern about the recovery of employment since U.S. manufacturers are still being a little cautious, he added.

And government income supports are being reviewed and adjusted in Canada and the United States, which could pose a problems for employment gains if there is any dropoff in these programs.

Friday's U.S. jobs report will be important, he said, because it should show at what rate employment comes back.

The S&P/TSX composite index closed up 130.55 points at 16,644.99.

In New York, the Dow Jones industrial average was up 215.61 points at 28,645.66. The S&P 500 index was up 26.34 points to a record close of 3,526.65, while the Nasdaq composite gained 164.21 points to 11,939.67, also a record.

The Canadian dollar traded for 76.60 cents US compared with 76.68 cents US on Monday.

Consumer discretionary was the second strongest sector on the TSX as shares of BRP Inc. increased 5.7 per cent. Energy was up about one per cent with Whitecap Resources Inc. up 6.6 per cent.

The October crude contract was up 15 cents at US$42.76 per barrel and the October natural gas contract was down 10.3 cents at nearly US$2.53 per mmBTU.

Materials was slightly lower despite higher gold prices as B2Gold Corp. and Iamgold Corp. were each down about three per cent.

The December gold contract was up 30 cents at US$1,978.90 an ounce and the December copper contract was down 3.3 cents at almost US$3.03 a pound.

This report by The Canadian Press was first published Sept. 1, 2020.

Companies in this story: (TSX:BTO, TSX:IMG, TSX:WCP, TSX:SHOP, TSX:BB, TSX:KXS, TSX:DOO, TSX:GSPTSE, TSX:CADUSD=X)

News from © The Canadian Press, 2020
The Canadian Press

  • Popular vernon News
View Site in: Desktop | Mobile