Canada’s main stock index on Friday inched past the record high it hit a day earlier, helped by gains for the shares of gold miners and uranium producers but the move was limited as investors took stock of recent advances for the market. U.S. markets were mixed.
The S&P/TSX composite index ended up 1.28 points at 23,867.55, moving past the record closing high it posted the previous day.
For the week, the index was up 1.3%, its sixth weekly gain in the last seven weeks, after the Federal Reserve cut interest rates for the first time in four years, boosting investor sentiment globally.
“Today, I think the market (is) just taking a bit of a breather,” said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth. “I haven’t really seen anything that would warrant caution.”
Domestic data was upbeat. It showed retail sales rising 0.9% in July from June, eclipsing expectations for a gain of 0.6%, while a preliminary estimate showed sales increasing 0.5% in August.
The materials group, which includes fertilizer companies and metal mining shares, added 0.6% as the price of gold climbed 1.3% to notch a record high.
Uranium producers were among the biggest gainers, with shares of Cameco Corp adding 8.1%.
Utilities and consumer staples both gained 0.5%, while industrials were a drag, falling 0.9%, including declines for railroad shares.
Energy also lost 0.9% as the recent rebound in oil prices paused. U.S. crude oil futures settled 3 cents lower at $71.92 a barrel.
After notching their biggest daily percentage gains since mid-August, major U.S. averages were subdued for most of the session, but managed to secure weekly gains of at least 1%.
Stocks briefly had pared losses after comments from Fed Governor Christopher Waller increased expectations the central bank will cut interest rates by 50 basis points at its November meeting, having just cut by 50 bps on Wednesday.
Fellow Governor Michelle Bowman, however, maintained that a smaller Fed cut this week would have been preferred.
“The market is still trying to recalibrate because, yes, there were some market participants that may have expected 50 basis points but a lot of people didn’t,” said Sid Vaidya, U.S. chief wealth strategist at TD Wealth in New York.
“You have to be a little bit more selective and measured just because we are expecting growth to slow down a little bit and valuations, especially in large-cap growth, are a bit stretched so you want to be a bit selective.”
The Dow Jones Industrial Average rose 38.17 points, or 0.09%, to 42,063.36, the S&P 500 lost 11.09 points, or 0.19%, to 5,702.55 and the Nasdaq Composite lost 65.66 points, or 0.36%, to 17,948.32.
For the week, the S&P 500 gained 1.36%, the Nasdaq rose 1.49%, and the Dow climbed 1.62%.
Markets are fully pricing in a cut of at least 25 bps in November, with expectations for a cut of 50 bps given a 48.9% chance, according to CME’s FedWatch Tool.
Utilities surged 2.69% to a record high as the best-performing of the 11 major S&P sectors, led by a 22.29% jump in Constellation Energy shares after the company signed a data-center deal with Microsoft to help resurrect a unit of the Three Mile Island nuclear plant in Pennsylvania.
Also supporting the Dow was Intel, whose shares closed up 3.31% after the Wall Street Journal reported Qualcomm had made a takeover approach to the chipmaker.
FedEx plunged 15.23% after lowering its full-year revenue forecast, sending the Dow Jones Transport index down 3.53%, its biggest daily drop since late April 2023.
Nike jumped 6.84% after saying former senior executive Elliott Hill will rejoin the company to succeed John Donahoe as CEO.
Options and futures linked to stock indexes and individual stocks were set to expire simultaneously on Friday in an event known as “triple witching,” and helped lead to the heaviest trading-volume day of the year.
Historically, equities have performed well in a rate-cutting environment. However, the outlook appears bleak with the S&P 500′s valuations high above its long-term average.
Declining issues outnumbered advancers by a 1.66-to-1 ratio on the NYSE and by a 1.87-to-1 ratio on the Nasdaq.
The S&P 500 posted 32 new 52-week highs and one new low while the Nasdaq Composite recorded 114 new highs and 105 new lows.
Volume on U.S. exchanges was 19.97 billion shares, compared with the 11.48-billion average for the full session over the last 20 trading days.
Reuters, Globe staff