Stocks Solidify Gains by Midday

CAE, Cenovus in Focus

Equities in Toronto rose on Thursday, as data showed domestic manufacturing activity expanded in September at its fastest pace in more than two years, bolstering optimism around a post-coronavirus economic recovery.

The TSX gained 61.14 points to approach noon at 16,182.52.

The Canadian dollar pulled added 0.06 cents to 75.20 cents U.S.

The largest percentage gainer on the TSX was CAE Inc., which jumped $1.07, or 5.5%, to $20.55, after BMO upgraded the rating of the flight simulator maker's stock to outperform from market perform.

Its gains were followed by Brookfield Property Partners L.P, which rose 60 cents, or 3.7%, to $16.63.

Cenovus Energy fell 38 cents, or 7.3%, the most on the TSX, to $4.81, after JPMorgan downgraded the stock to "underweight" from "neutral" and the second-biggest decliner was NovaGold Resources, down 50 cents, or 3.2%, to $15.36.

On the economic slate, Statistics Canada said the value of building permits for August rose 1.7% to $8.1 billion in August, driven by an increase in the residential sector in Ontario and Quebec.

Also, the Markit Manufacturing Purchasing Managers Index registered 56.0 in September, up from 55.1 in August, to signal the sharpest improvement in operating conditions since August 2018.

ON BAYSTREET

The TSX Venture Exchange gathered 7.94 points, or 1.1%, to 714.45.

All but three of the 12 TSX subgroups were higher midday, with information technology picking up 2.5%, gold, better by 1.5%, and materials improving 1.4%.

Among the three laggards, energy lost 4%, while consumer staples and financials fell backward 0.2% each.

ON WALLSTREET

U.S. stocks climbed on Thursday to kick off a new month and quarter as investors monitored progress on lawmakers’ negotiations on further fiscal stimulus.

The Dow Jones Industrial Average grew 74.05 points to 27,855.75.

The S&P 500 gained 14.72 points, to 3,377.72.

The NASDAQ added 97.71 points to 11,265.22.

Major technology shares provided the broader market with some support as Amazon, Microsoft, Alphabet and Facebook all jumped at least 1%. The S&P 500 tech sector was the biggest winner among the 11 groupings, up 0.9%.

The major averages are coming off their first down month since March. The 30-stock Dow lost 2.2% in September, a typically weak month for equities. The S&P 500 fell 3.9% for the month, while the technology-heavy NASDAQ dropped 5.2%.

However, all three benchmarks achieved strong gains for the third quarter. The S&P 500 rose 8.5% in the quarter for its sixth positive quarter in seven and the index is up 5% for the year.

The House of Representatives delayed a vote on the Democrats’ $2.2-trillion rescue package on Wednesday evening to allow for more talks, which some saw as a sign that a deal can still be reached.

White House chief of staff Mark Meadows told reporters late Wednesday that President Donald Trump has extended an offer for more than $1.5 trillion in stimulus. No further details were given on the exact figure except that anything around $2 trillion and above would be a "real problem."

Mixed economic data also kept sentiment in check. U.S. manufacturing activity slowed in September as a purchasing manager’s index fell to a reading of 55.4 from 56 in August, according to the Institute for Supply Management.

The weekly jobless claims report came in better than expected, however. The U.S. Labor Department said first-time filers for unemployment benefits tallied 837,000 in the week ending Sept. 26. Economists polled by Dow Jones expected a total of 850,000.

Prices for the 10-Year Treasury stepped up, lowering yields to Wednesday’s 0.68%. Treasury prices and yields move in opposite directions.

Oil prices retreated $2.24 to $37.98 U.S. a barrel.

Gold prices rallied $20.70 to $1,916.20 U.S. an ounce.