Canada’s main stock index treaded water on Friday despite gains in the technology sector and among marijuana producers.
At 11:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 15.21 points, or 0.1 per cent, at 16,017.09.
Only four of the index’s 11 major sectors were higher, led by a 2.7-per-cent jump by the health care sector. Canopy Growth Corp. sat up 5.7 per cent, while Aphria Inc. rose 9.8 per cent.
The information technology sector increased 0.7 per cent in morning trading. Shopify, Celestica and Evertz Technologies gained between 0.7 per cent and 2 per cent and lifted the technology sector.
Consumer staples lost 0.8 per cent, led by a 3-per-cent decline in Empire Company Ltd. and a 1-per-cent drop in Loblaw Companies Ltd.
U.S. stocks edged higher on Friday as banks gained after 10-year U.S. Treasury yields topped 3 per cent, but gains were capped by a drop in the rate-sensitive utilities, real estate and telecom sectors.
Financial stocks rose 0.73 per cent, the most among the 11 major S&P 500 sectors, after the benchmark government yield broke back above the key technical level for the first time since the start of Aug. 2.
Helping drive yields was an upward revision in U.S. retail sales for July, which kept intact expectations of strong economic growth in the third quarter. August sales, however, recorded their smallest gain in six months.
“The rising yields are going to put some pressure on equities, so everybody will focus on treasury markets for direction on equities,” said Tom White, chief market strategist at TradeWise Advisors in Chicago, Illinois.
With yields moving higher, the real estate index fell 1.24 per cent and utilities 0.78 per cent. Telecoms declined 0.75 per cent.
Also weighing on utilities was NiSource, which tumbled 9.1 per cent after fire investigators said they suspected the company’s unit, Columbia Gas, was linked to a series of gas explosions in Boston suburbs on Thursday.
“We’re seeing a back-and-forth movement, which is something we saw throughout the week, (as) valuations are pretty high to begin with,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“But it’s healthy to have a little bit of a pause and it’s probably welcome.”
The Dow Jones Industrial Average was up 53.92 points, or 0.21 per cent, at 26,199.91. The S&P 500 was up 2.48 points, or 0.09 per cent, at 2,906.66 and the Nasdaq Composite was up 12.23 points, or 0.15 per cent, at 8,025.94.
Energy stocks rose 0.76 percent as U.S. crude oil prices jumped more than 1 per cent.
The consumer discretionary sector fell 0.18 per cent, weighed down by Walmart, which dropped 0.6 per cent after Goldman Sachs raised questions around the purchase of a majority stake in India’s Flipkart.
L Brands Inc jumped 5.3 per cent after the owner of Victoria’s Secret said it would close all 23 of its Henri Bendel stores and the Henri Bendel e-commerce website in January.
Adobe Systems rose 3.2 per cent after the company topped quarterly revenue and profit expectations.
Oil prices were largely steady on Friday after the previous session’s steep drop due to demand concerns, but were on track to end the week higher bolstered by earlier gains on supply constraints from Iran following U.S. sanctions.
Brent crude fell 23 cents to trade at $77.95 a barrel. The global benchmark fell 2 per cent on Thursday after rising on Wednesday to its highest since May 22 at $80.13.
U.S. West Texas Intermediate (WTI) futures were up 11 cents at $68.70 a barrel after dropping 2.5 per cent on Thursday.
After a volatile week, Brent was set for a 1.4-per-cent weekly rise and WTI 1.3 per cent.
Prices are holding at a lower level under pressure from high U.S. East Coast gasoline stockpiles and a sense that there will be considerable demand destruction from Hurricane Florence, which made landfall on Friday, said John Kilduff, a partner at Again Capital in New York.
Cutbacks from Iran’s production following the imposition of U.S. sanctions did not provide an immediate enough catalyst for to support prices, he said.
Capped by demand concerns, prices are unlikely to rally above $80 a barrel for Brent, he said.
“The price action of yesterday confirms $80.00 a barrel as a strong resistance line in Brent,” consultancy Petromatrix said in a research note.
“There has been a lot of speculative interest searching for Brent above $80.00 a barrel on the back of the U.S. sanctions on buyers of Iranian crude oil, but so far this year any buying of Brent above $79.00 barrel did not have a long shelf life.”
Price rises were capped after U.S. Energy Secretary Rick Perry said Saudi Arabia, other members of OPEC and Russia were to be admired for trying to prevent a spike in global oil prices.