Tech stocks help lift S&P/TSX composite index, U.S. stock markets mixed

Canada’s main stock index posted a modest gain Friday, while U.S. markets were mixed but the S&P 500 surpassed 5,000 points for the first time.

The S&P/TSX composite index closed up 89.96 points at 21,009.60.

In New York, the Dow Jones industrial average was down 54.64 points at 38,671.69. The S&P 500 index was up 28.70 points at 5,026.61, while the Nasdaq composite was up 196.95 points at 15,990.66, gaining 1.25 per cent.

On the S&P 500, tech and consumer discretionary were among the sectors leading the way, but there was also strength in other areas like financials, health care and utilities, said Mona Mahajan, senior investment strategist at Edward Jones. She said that’s a positive sign.

“This idea that we’re getting a bit of broadening in market participation, I think, is starting to show some signs of life,” she said.

“We’re probably still early days because where we haven’t seen really a pickup in participation is other parts of the market capitalization spectrum, so small caps, and even mid caps have lagged to some extent this year,” added Mahajan.

“So we think there could be some pickup or catch-up in those parts of the market, especially if we continue to see an economy that holds up.”

U.S. markets have more or less risen in a straight line since October, said Mahajan.

A period of consolidation is possible at some point, she said, given such a strong and extended run for markets.

But such a period would be more of a buying opportunity before more gains than the marker of a new period, she said.

In Canada, the latest jobs report showed the economy added 37,000 jobs in January while the unemployment rate fell for the first time since December 2022.

The Bank of Canada will continue to be patient as it waits for the right time to start cutting rates, said Mahajan.

“But keep in mind the difference between the U.S. and Canada,” she noted. “The Canadian economy has already shown signs of softening. The U.S. economy continues to hold up above-trend growth.”

Both the Bank of Canada and the U.S. Federal Reserve are likely to start cutting in June, she said, but if one of them cuts first it will likely be the central bank north of the border because of the softer economy.

The Canadian dollar traded for 74.31 cents US, compared with 74.26 cents US on Thursday.

The March crude contract was up 62 cents at US$76.84 per barrel and the March natural gas contract was down seven cents at US$1.85 per mmBTU.

The April gold contract was down US$9.20 at US$2,038.70 an ounce and the March copper contract was down two cents at US$3.68 a pound.