TSX climbs 126 points in early trading; dollar strengthens

On Tuesday, the Fed issued a disappointing report on US manufacturing, saying it fell 0.05 per cent in August, its biggest decline since January 2014.

The Toronto stock market posted a triple-digit gain Tuesday as a small recovery in oil and metals prices helped buoy North American markets.

Industrials gained 1.87 percent after Statistics Canada reported Wednesday that the manufacturing sales rose 1.7 percent to 52.2 billion Canadian dollars in July, as sales went up in the motor vehicle parts and motor vehicle assembly industries.

The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed up 301.07 points, or 2.24 percent, at 13,763.78.

The most influential positive movers on the index were Suncor Energy Inc, which bounced 4.2 per cent to $34.81, and Canadian Natural Resources, which jumped 6.3 per cent to $27.98. “We’ll have to see if that’s the case”, said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

He said a spike in U.S. Treasuries yields could suggest increased bets on a Fed hike when it meets later this week, and that a rise could be the vote of confidence investors need to push stocks higher.

Canadian stocks ended lower on Monday, tracking declining global equity markets due largely to some soft economic data from China over the weekend which had investors in a gloomy mood.

West Texas Intermediate crude was up 59 cents in the afternoon at $44.59 United States a barrel.

“I think the rally here is people don’t expect an interest increase and so we have this continuing liquidity out there”. The growth was also the biggest since February, when production rose 0.9 percent.

Continued strength in retail spending is contributing to a strengthening USA economy and will be among the data weighed by the Fed as it decides whether to start raising interest rates. While investors remain confident the central bank will raise borrowing costs this year, traders are pricing in a 28-per-cent chance of action on Thursday, down from 48 percent before China’s currency devaluation last month.

The Organization for Economic Cooperation and Development said the Fed would be right to begin raising rates this week but it needs to signal its intentions to the rest of the world. Another alarm bell sounded Wednesday for the future of print newspapers in Canada when one of the country’s largest and oldest dailies announced the end of its printed weekday edition almost three years after introducing a free digital tablet edition.