Toronto's main stock index ended slightly higher on Friday as an end-of-session rally in financial shares outweighed weakness in commodity stocks, which were under pressure after a US consumer confidence report raised doubts about economic recovery.
The S&P/TSX composite index closed up 22.45 points, or 0.2 percent, at 10,848.01, with seven of its 10 main groups higher. For the week, the index ended down 0.3 percent. The late flurry in financial stocks lifted the market as traders squared up their books at the end of the week.
"It was more technical than fundamental," said John Ing, president of Maison Placements Canada. Royal Bank of Canada, the largest stock on the index, climbed 1.2 percent to C$51.36, while Toronto-Dominion Bank ended up 0.74 percent at C$63.77. Elvis Picardo, an analyst and strategist at Global Securities in Vancouver, said that comments by Manulife's third largest investor, Stephen Jarislowsky, chairman of Jarislowsky Fraser, that he may buy more Manulife shares may have helped financials.
"US stocks paring their losses towards the end of the day may have also helped sentiment," he said. The stronger financials outweighed a 0.48 percent drop in the index's energy sector and a 0.59 percent fall in the materials group. The biggest heavyweight loser on the index was Suncor Energy, which closed down 1.67 percent at C$35.84, followed by fellow oil company EnCana, down 1.1 percent at C$56.56, and miner Teck Resources, down 2.7 percent at C$29.OO.
The declines were "driven by the disappointment in the US consumer confidence numbers and building on the retail sales numbers we saw yesterday," said Rick Hutcheon, president and chief operating officer at RKH Investments. The Reuters/University of Michigan preliminary August survey showed US consumer dropped to 63.2 from 66.0 in July, its lowest level since March and well below median expectations for a reading of 68.5.
The consumer confidence report came on the heels of Thursday's unexpectedly soft US retail sales report, further damaging investor sentiment. The price of US crude oil futures fell $3.01, or 4.27 percent, to settle at $67.51 a barrel for its biggest loss in two weeks as the weak US consumer confidence data hurt economic recovery hopes.
Gold futures also fell as the consumer confidence data weakened gold's appeal as a hedge against inflation. Next week will be a quiet one for earnings, before picking up the following week with the big six banks Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank, TD, National Bank of Canada, and Bank of Nova Scotia all reporting.