Investors in Canadian stocks on Tuesday cheered a resounding Liberal election victory that could loosen government purse strings to kickstart growth, as construction firms and railways rose with heavyweight resource and financial stocks.
The S&P/TSX composite index bolted higher 108.65 points to greet noon 13,867.03
The Canadian dollar regained 0.37 cents at 77.17 cents U.S.
The Liberals' strong showing removed the uncertainty that could have resulted from a minority government. And while the new government plans to run deficits, it has also said it would keep corporate tax rates steady.
During the campaign, Liberal leader Justin Trudeau pledged to run a $10-billion annual budget deficit for three years to invest in infrastructure and help stimulate Canada's anemic economic growth.
Among the stocks to jump were construction companies SNC-Lavalin Group, which added 2.7% to $43.50, and Aecon Group Inc, which gained 3.8% to $15.26.
The two main railways also rose, with Canadian Pacific Railway up 2.5% to $194.93 after reporting profit that beat expectations on higher freight rates and lower operating costs.
Its rival Canadian National Railway added 1.3% to $78.07.
Health-care stocks pulled back, weighed down by a 5.6% drop in Valeant Pharmaceuticals International Inc, to $200.71.
Progressive Waste Solutions was the second biggest weight, plunging 17.5% to $29.07 after the waste management company cut its earnings forecast.
Outside the main index, Canada's nascent medical marijuana sector was higher. Trudeau has talked about legalizing pot, and shares of some of the better-recognized companies surged after the Liberal sweep.
TSX Venture-listed Canopy Growth Corp, the first company to go public in the sector in Canada last year, rose some 9% to $2.37.
On the economic front, Statistics Canada reported wholesale trade edged down 0.1% to $55.3 billion in August. Declines in four sub-sectors, in particular the machinery, equipment and supplies sub-sector, accounted for the decrease. Higher sales in the miscellaneous sub-sector partially offset these declines
ON BAYSTREET
The TSX Venture Exchange dropped 0.98 points to 550.95
All but two of the 13 TSX subgroups moved higher by midday, propelled by gold, up 3.1%, materials, ahead 2.1%, and energy, gushing 1.7%.
The two laggards were health-care, fading 3.2%, and information technology, slumping 0.3%.
ON WALLSTREET
U.S. stocks traded in a narrow range Tuesday as Wall Street digested a slew of corporate earnings reports and U.S. housing starts data.
The Dow Jones industrial average faded 11.73 points to 17,218.81, led lower by IBM and with United Technologies leading advancers.
The S&P 500 dipped 0.45 points to 2,033.21, with telecommunications leading six sectors higher and health care being the greatest laggard.
The NASDAQ index lost 10.47 points to 4,897.75
IBM reported earnings per share that were slightly above estimates on Monday, but its revenues came in far below consensus, pushing the stock down about 5%.
United Technologies, Travelers and Verizon reported quarterly results. Verizon and Travelers both beat Wall Street estimates for earnings and revenue, while United Technologies beat on earnings per share but missed on revenue.
In corporate news, Yum Brands announced it would spin off its China business into a separate, publicly traded company.
Amazon.com said it will create over 100,000 holiday season jobs, above last year's 80,000.
Aetna said its proposed takeover of Humana was approved by shareholders of both companies. The deal is expected to close in the second half of next year.
Investors also took in September housing starts data, which came in well above expectations at 1.206 million.
Prices for 10-year U.S. Treasuries dipped, raising yields to 2.07% from Monday’s 2.03%. Treasury prices and yields move in opposite directions.
Oil prices retreated two cents a barrel to $45.87 U.S.
Gold prices remained positive $5.28 to $1,176.07 U.S. an ounce.
