S&P/TSX composite edges higher Friday, U.S. markets mixed

TORONTO — Canada’s main stock index eked out a gain Friday, while U.S. markets ended the day mixed as tech pulled equities lower.

The S&P/TSX composite index closed up 23.74 points at 21,125.28.

In New York, the Dow Jones industrial average was up 60.30 points at 38,109.43.The S&P 500 index was down 3.19 points at 4,890.97, while the Nasdaq composite was down 55.13 points at 15,455.36.

Stocks took a breather to end a strong week in equities, said Angelo Kourkafas, a senior investment strategist at Edward Jones.

“Even though tech has been doing the heavy lifting, pushing the major indices to new highs, for the day, the Nasdaq is lower,” he noted. 

Intel dragged on the broader market after its forecasts for revenue and profit disappointed, despite reporting strong results. Its stock closed down almost 12 per cent. 

Meanwhile, a pair of U.S. economic reports Friday painted a picture of a continually resilient economy even as interest rates weigh further on inflation. 

The U.S. Federal Reserve’s preferred measure of inflation continued to slow last month, according to the latest report from the government. Core prices rose 2.9 per cent from a year earlier. 

The data gives the Fed a little more room to start cutting its key interest rate, said Kourkafas, though when that could happen is still up for debate; expectations for cuts to start in March are currently more or less split. 

Another report, meanwhile, showed consumer spending strengthened in December by more than expected. 

“That fits into the broader narrative as we wrap up the week and think about the solid gains,” said Kourkafas. 

The resilience of the American economy increases the chances of a soft landing, he said. 

Next week will see the first Fed meeting of the year, where it’s expected to echo Canada’s decision this week: a continued rate hold, but a shift in messaging towards cuts, said Kourkafas.

Some of the biggest tech names that have been leading market strength will also report earnings for the latest quarter, including Microsoft, Alphabet, Amazon and Meta. 

“All of these, of course, matter a lot for the markets and for the S&P specifically,” said Kourkafas.

“But also, it will be interesting to see what kind of outlook they provide,” he added, especially on artificial intelligence, which has been a key factor in the tech sector’s outperformance recently. 

Canada will also get fresh GDP data. 

The Canadian economy has not been nearly as resilient compared with the U.S., and is teetering on the edge of a technical recession as interest rates take their toll.

The Canadian dollar traded for 74.35 cents UScompared with 74.10 cents US on Thursday.

The March crude oil contract was up 65 cents at US$78.01 per barrel and the March natural gas contract was down half a penny at US$2.18 per mmBTU.

The February gold contract was down 50 cents at US$2,017.30 an ounce and the March copper contract was down two cents at US$3.85 a pound.

This report by The Canadian Press was first published Jan. 26, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Rosa Saba, The Canadian Press