Toronto Stocks Soar

Aurora, Celestica in Focus


Equities in Canada’s biggest market were on course for its biggest percentage gain in two months on Wednesday as energy stocks climbed more than 3%, while investors focused on the U.S. Federal Reserve's policy decision due later in the day.

The TSX Composite vaulted 198.93 points, or 1%, midday Wednesday at 20,443.22.

The Canadian dollar acquired 0.52 cents to 78.53 cents U.S.

Aurora Cannabis shares were unchanged at $7.72 after it said it will shut down a facility in Edmonton, adding to the woes of the cash-strapped Canadian pot producer which has been reeling under the impact of the pandemic since last year.

Celestica surged $1.61, or 15.6% to $11.93, thus becoming the biggest percentage gainer on the TSX after the chipmaker agreed to buy PCI Ltd for $306 million in cash from Platinum Equity.

ON BAYSTREET

The TSX Venture Exchange gained 4.43 points to 873.04.

All 12 TSX sectors were positive at noon hour, with energy gushing 3.7%, health-care springing 2.7%, and consumer discretionaries ahead 1.5%.

ON WALLSTREET

U.S. stocks jumped on Wednesday ahead of the Federal Reserve’s decision on monetary policy as stocks try to snap out of their September slump.

The Dow Jones Industrial Average popped 427.15 points, or 1.3%, to 34,346.99, led by Chevron and Boeing

The S&P 500 hiked 50.13 points, or 1.2%, to 4,404.32, amid a 3.3% jump in the energy sector

The NASDAQ Composite spiked 152.52 points, or 1%, to 14,898.91,

At the center of investor concerns is embattled Chinese property developer Evergrande, which is facing a possible default if it can’t make millions of dollars in debt payments on U.S. dollar-denominated bonds this week.

Evergrande’s shares in Hong Kong are down nearly 90% since July 2020 as China cracks down on real estate speculation. Investors worry about a step down in global economic growth if China slows its property market too much or lets Evergrande fail.

Helping sentiment overnight was word from Evergrande that its real estate group would pay the interest on time on a mainland-traded bond denominated in yuan.

Commodity-related stocks led the comeback Wednesday as fears eased about ripple effects from Evergrande. Devon Energy surged more than 7%, while APA, Diamondback Energy and Marathon Oil all jumped about 5%. Wynn Resorts bounced more than 2%.

FedEx shares tumbled 8% after profit fell at the shipper last quarter because of rising labor costs. FedEx also cut its forecast for the full year.

The Fed will conclude its two-day meeting on Wednesday and release a policy statement with economic and interest rate forecasts at 2 pm E.T. Chairman Jerome Powell will then hold a press conference after.

The central bank has the difficult task of soothing markets during a tumultuous month, while at the same time preparing investors for the removal of some monetary stimulus. Powell has previously said a tapering of the Fed’s emergency $120 billion in monthly bond buying could begin as soon as this year.

On Fed decision days, stocks tend to trade higher throughout the morning and in the immediate aftermath of the release, but the market typically falls slightly when Powell speaks during his news conferences.

Prices for 10-Year Treasurys were higher, lowering yields to 1.31% from Tuesday’s 1.32%. Treasury prices and hields move in opposite directions.

Oil prices added $1.42 to $71.91 U.S. a barrel.

Gold prices regained $1.30 to $1,779.50 U.S. an ounce.