5:40 p.m. ET: TSX has best quarter in more than a decade as gold hits nine-year high

Canada's main stock index ended its best quarter in more than a decade as the price of gold reached its highest level since 2011.

The S&P/TSX composite index closed up 125.50 points at 15,515.22 to finish 2.1 per cent higher in June and ahead nearly 16 per cent over the last three months.

The unprecedented gains follow a disastrous March, which still leaves the Toronto stock market about nine per cent down for the year.

"It's obviously been a tumultuous quarter to say the least," said Allan Small, senior investment adviser at HollisWealth.

"I think most people came into this quarter coming out of March afraid, nervous, feeling as though they couldn't see the light at the end of the tunnel. And I think we're leaving this quarter with a lot more optimism."

Small said he went into Tuesday's session before the Canada Day holiday skeptical about the outcome after last week's pullback as infection rates surged in several southern and western states.

Unlike initial infections, however, the latest increases haven't been accompanied by as many hospitalizations and deaths.

Stock markets have swung wildly with the impact of the COVID-19 pandemic that's caused mass lockdowns, high unemployment and extensive fiscal and monetary stimulus.

In New York, the Dow Jones industrial average was up 217.08 points at 25,812.88 as it ended its best quarter since 1987. The S&P 500 index was up 47.05 points at 3,100.29, while the Nasdaq composite was up 184.61 points at 10,083.64, a record close.

The partial market recovery has exposed a disconnect within the economy which continues to struggle as reopenings are staggered and constrained to prevent new infections.

The stock market gains came amid strong consumer confidence numbers and Congressional testimony by Federal Reserve chairman Jerome Powell.

He said the economic outlook remains uncertain with output and employment still far below their pre-pandemic levels.

"A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities," he said, adding that all levels of government need to provide relief to support the recovery for as long as needed.

Investors in the market drop have been rewarded, while those who were scared onto the sidelines have been left behind, suggested HollisWealth senior investment adviser Small.

He expects stock markets will move in fits and starts depending on virus headlines, but tread higher in the third quarter and surge into the final months of 2020.

"I think the market is looking to the end of the year, and that's why you're seeing the gains today," he said in an interview.

"(It's) kind of bringing forward a lot of what we're going to see in the fall and into the start of the winter."

The materials sector gained more than two per cent on higher gold prices to lead the TSX. Iamgold Corp. and Hudbay Minerals Inc.  rose 7.8 and 7.3 per cent respectively.

The August gold contract was up US$19.30 at US$1,800.50 an ounce and the September copper contract was up 3.6 cents at nearly US$2.73 a pound.

Industrials increased nearly one percentage point even though shares of Air Canada lost another three per cent.

The heavyweight financials sector was up 0.8 per cent.

Energy was one of four major sectors to fall as Tourmaline Oil Corp. dropped 3.5 per cent and Seven Generations Energy Ltd. was down 2.6 per cent on lower crude oil prices.

The August crude contract slid back 43 cents at US$39.27 per barrel and the August natural gas contract was up 4.2 cents at US$1.75 per mmBTU.

1:00 p.m. ET: North American markets pare gains, remain on track for best quarter in decades

North American equity markets pared some of their earlier gains heading into the afternoon, but remained on track for their strongest quarterly performance in decades. The S&P/TSX Composite Index rose half a per cent, the S&P 500 gained 0.7 per cent, the tech-heavy Nasdaq Composite Index was up 1.1 per cent and the Dow Jones Industrial Average slipped a modest 0.15 per cent, though trading volumes were thin across the board.

All four of the major indices have rocketed higher in the second quarter after a disastrous start to the year, with the TSX on pace for its largest quarterly gain since 2009, the S&P 500 and Dow both on track for their biggest gains since 1998 and the Nasdaq set to post its largest advance since 2001.

In Toronto, seven of the 11 TSX subgroups were in positive territory, led by materials, information technology and real estate. 140 of the composite’s 222 constituents were trading higher.

Cineplex Inc. continued to be the lead laggard on the TSX, with shares falling 19 per cent after the nation’s dominant movie theatre operator warned of material uncertainties around its ability to continue as a going concern after COVID-19-induced shutdowns cratered revenue in its most recent fiscal quarter. Shares of the company flirted with the $8 level, putting Cineplex on track to close at a record low.

South of the border, the six per cent slide in shares of Boeing Co. dragged on the Dow after the company lost a couple of key orders for the beleaguered Boeing 737 MAX jets. Norwegian Air Shuttle ASA terminated its US$10.6-billion order for the jets, while Singapore’s BOC Aviation Ltd. also canceled its order for 30 of the narrow body planes. The cancellations come one day after Boeing gained Federal Aviation Administration approval to begin flight tests of the jet, which has been grounded for more than a year after a pair of deadly crashes.

The Nasdaq’s outperformance was in part due to the nearly six per cent gains in shares of Tesla Inc. and Lululemon Athletica Inc.

Shares of Tesla were in rally mode after Reuters reported Chief Executive Officer Elon Musk had sent a memo to employees urging them to ramp up production in order to help the company break even in the second quarter. Lululemon’s shares rose in the wake of its US$500-million deal to purchase at-home exercise startup Mirror for US$500-million.

Oil prices slipped modestly, with U.S. benchmark West Texas Intermediate down two-tenths of a per cent to US$39.62 per barrel and Alberta’s Western Canadian Select falling three per cent to US$29.37 per barrel.

The Canadian dollar gained against its American counterpart, rising a quarter of a cent to 73.45 cents U.S.


9:40 a.m. ET: North American markets mixed, on track for best quarter in decades

North American equity markets were mixed in early trading Tuesday amid light trading volumes into the end of the second quarter. The S&P/TSX Composite Index and Dow Jones Industrial Average were both essentially flat on the day, while the S&P 500 gained 0.2 per cent and the Nasdaq Composite Index rose 0.4 per cent.

Though trading was muted to cap off the month, the second quarter is shaping up to be one of the strongest rallies in decades. The TSX’s 15-per-cent gain through Q2 is the largest quarterly rally since the second quarter of 2009. Meanwhile, both the Dow and the S&P 500 are on pace for their largest quarterly gains since 1998 and the Nasdaq’s 28-per-cent gain is the largest since the height of the dot-com bubble in 2001.

In Toronto, five of the 11 TSX sectors were in negative territory on Tuesday, with the energy group’s 2.25-per-cent decline leading the way lower.

Cineplex Inc. was the worst-performing stock on the composite, with shares falling more than 21 per cent after the theatre operator warned of “material uncertainties” surrounding its ability to continue as a going concern. The company also reported a 22.4-per-cent plunge in revenue in its most recent fiscal quarter.

On the flip side, shares of Lululemon Athletica Inc. rallied more than seven per cent after the athleisure-wear company announced it is acquiring at-home exercise startup Mirror for US$500 million.

Oil prices slipped amid concerns over the potential economic fallout from the spike in virus cases in some U.S. states as some jurisdictions eased stay-at-home recommendations. U.S. benchmark West Texas Intermediate crude fell 1.5 per cent to US$39.10 per barrel, while Alberta’s Western Canadian Select shed 1.95 per cent to trade at US$29.69 per barrel.

The Canadian dollar fell 0.1 per cent against its American counterpart to 73.12 U.S. cents.

—With files from BNN Bloomberg's Ian Vandaelle