The Toronto stock market ended Wednesday just a few points shy of its record high close and Wall Street continued its tear as investors remain optimistic about President Donald Trump’s grand plans for the U.S. economy.
The S&P/TSX composite index gained 33.15 points at 15,643.84, with financial stocks racking up gains. The benchmark had surpassed its record close of 15,657.63 set on Sept. 3, 2014, in the morning but had pulled back later in the afternoon, weighed down by losses from the gold and materials sectors.
It was again a record-breaking day in U.S. markets as the Dow Jones industrial average closed above 20,000 points for the first time.
The Dow ended the day up 155.80 points, or 0.78%, at 20,068.51, led by gains in banks and other financial companies.
It had been flirting with the 20,000 milestone for several weeks, and although some may think of the gauge as just a psychological barrier for investors, investment adviser Michael Currie says it can be a sign that the good times in equities is not coming to an end any time soon.
“It’s easy to say it’s just a number but the last few times it broke a (new) thousand it did signal a start for at least a month or two or three, an uptrend,” said Currie, who is also a vice president at TD Wealth.
“It gives people optimism, gets people who are not in the market getting back into it again, thinking its good. Historically, it’s a positive signal and keeps things going (higher), at least in the short term.”
North American stock markets have been rising steadily for the past several months since Trump was elected president on Nov. 8, a phenomenon analysts have nicknamed the “Trump Rally” or the “Trump Bump.”
Investors are buoyed by the belief that the economy will grow and industries such as banking and energy will benefit from his plans to loosen regulations, lower taxes and spark infrastructure spending.
“There is nothing but optimism, except for a few blips on some days,” Currie said. “As an investor you can’t really ask for much more.”
He said the reason why financial institutions are the top performers on the Dow, which measures 30 blue chip stocks from various U.S. industries, and on the TSX is that they stand to benefit in a climate with fewer regulations.
Elsewhere in major U.S. markets, the S&P 500 was up 18.30 points at 2,298.37, while the Nasdaq composite was ahead by 55.38 points at 5,656.34 — both at record closes.
The Canadian dollar rallied for a third day in a row, climbing 0.55 of a U.S. cent to US76.53¢ against a weaker greenback.
Crude oil futures for March dipped US43¢ at US$52.75 and February gold fell US$13 at US$1,197.80 per ounce.
March natural gas contracts added US5¢ at US$3.35 per mmBTU and March copper contracts were unchanged at US$2.71 per pound.